Vietnam's coffee exports this month could ease to between 120,000 and 130,000 tonnes, or 2 million to 2.2 million bags, after an estimated 180,000 tonnes shipped in February, traders said on Tuesday. Falling supplies from Vietnam, the world's largest producer of robusta coffee, could prompt buyers to switch to other origins, as rival producer Indonesia has started harvesting, but prices remain at premiums to London futures.
"Export volumes this month will not be as high as February, partly because farmers slowed sales in recent days as prices dropped and they are not under pressure to sell much this month," said a trader in Ho Chi Minh City. Benchmark Liffe May robusta coffee futures fell $17 to close at $2,003 per tonne on Monday.
Domestic robusta prices eased to 39,300 dong ($1.89) per kg on Tuesday in Daklak, Vietnam's key growing province, from a range of 39,300-39,500 dong that stood steady in the past week. Prices reached a key level of 40,000 dong per kg late last month, at which farmers rushed to unload beans.
"Farmers slowed sales after prices fell below 40,000 dong," another trader at a foreign company in Ho Chi Minh City said. "In February they still needed to sell beans because that's when they started watering, while this month the selling pressure is lower," he said.
After the harvest ended in January, farmers in the Central Highlands coffee belt incorporating Daklak started watering trees under the 2012/2013 crop cycle. They need to buy fertiliser to feed trees, and fuel for water pumps. Watering comes in three to four phases and lasts until early May when rain returns.
February's coffee exports rose at least a quarter from a year ago to 180,000 tonnes. Vietnam shipped 160,600 tonnes in March 2011, after 144,000 tonnes loaded in the previous month, government data showed. With lower prices in London and in Vietnam's domestic markets, this week exporters offered robusta grade 2, 5 percent black and broken at discounts of $20-$30 a tonne to May contract, widening slightly from $20-$25 last Tuesday.
Bids stood at $30-$40 a tonne but the buying demand also remained thin, traders said. The offers and bid prices meant Vietnamese beans stood at $1,963-$1,983 a tonne, free-on-board Saigon Port, down from $1,972-$1,992 a tonne last Tuesday. "If London prices rise steadily, it's easy to buy from Vietnam, while when prices fall or move unstably, farmers prefer to hold back, thus exporters cannot buy much locally for loading," the first trader said. He said the slow purchase was not a problem because most exporters did not sell for forward shipments too far ahead.