Coffee farmers in Vietnam were slowing sales of fresh beans as prices remain below the key 40,000 dong per kg level, traders said on Tuesday, underscoring predictions of a drop in export volumes for November. With around half of this season's crop picked, fresh supplies are plentiful. But foreign buyers are well stocked after Vietnam exported record volumes in 2011/12 season and can afford to wait for lower prices, traders said. Traders and roasters are also well stocked.
"Stocks are now sufficient to cover November and December so only some are buying for January, while others, including major firms, have yet to step in," a trader in Ho Chi Minh City said. Domestic prices in Vietnam, the world's second-largest producer after Brazil and biggest robusta exporter, have been below 40,000 dong per kg, at which farmers often decide to unload stocks, since late October when the harvest gathered pace. Traders have forecast coffee exports this month at 75,000 to 100,000 tonnes, or 1.25 million to 1.67 million bags, below an estimated 105,000 tonnes shipped last month.
Vietnam harvested a record high crop in the 2011/2012 season on higher yields and as new areas became productive, with output now estimated at between 1.65 million and 1.7 million tonnes, or 27.5-28.3 million 60-kg bags, traders said. Around 1.6 million tonnes were shipped in the season ended September and old crop beans were still arriving last month and in November, traders said.
Prices in Daklak, Vietnam's top growing province, dropped to 37,800-38,200 dong ($1.81-$1.83) per kg on Tuesday, from 39,100-39,500 dong a week ago, tracking a fall in London's robusta futures market overnight. January robusta contract eased $3, or 0.16 percent, to settle at $1,898 a tonne on Monday, just above Thursday's low of $1,891, the lowest level for the second month since February 8. Given thin buying demand, exporters eased their quotations this week, putting the discount to January at $50 a tonne, versus $50-$60 a week ago, while bids were seen at $40-$45 a tonne.