Vietnam's coffee sales could slow next month at the start of the new harvest due to thin supply, partly because many exporters have struggled to secure loans, while farmers were under little pressure to sell thanks to strong prices since 2011, traders said.
Vietnam, the world's top producer of robusta beans, widely used to make instant coffee, will begin the 2012/2013 crop year in October, with output expected to ease by up to a fifth in Daklak, the top growing province. Exporters, many of whom have operated in the red over the past year, have found it difficult to secure funds from banks to buy coffee as lenders aim to keep their books clean, said a trader in Ho Chi Minh City on Tuesday.
"Farmers will not rush to sell after selling prices have been so high in the past year," he added. Robusta edged up to 41,900-42,200 dong ($2.01-$2.03) per kg on Tuesday in Daklak, from 41,800-42,100 dong the previous day, and within a range of 41,500-42,600 dong in the previous week.
The gain was supported by London November robusta which closed up 0.5 percent at $2,059 per tonne on Monday. Domestic prices are down 9 percent from a year ago this week, but have jumped 47 percent from the same period in 2010, when robusta reached 27,600-29,500 dong per kg, Reuters data showed. Farmers in Daklak told Reuters in late August that they could make a profit of at least 20 percent if prices remained at 40,000 dong per kg.