Vietnamese coffee prices continued to climb on Tuesday, having already reached their highest in nearly 18 months, supported by news of possible crop losses and slowing sales by farmers hoarding stocks. Higher prices would make it harder for exporters in the world's top robusta producer to secure sufficient volumes for loading and may further boost global prices of the bitter beans, which are increasingly used to make instant coffee.
Robusta coffee futures on Liffe rose to a five-month high on Monday, buoyed by concerns about serious dry weather in Vietnam, while ICE arabica futures fell. "It's impossible to buy from farmers after the news about a drought and a smaller crop," a Vietnamese exporter said by telephone from Daklak, the country's top growing province. He said his firm offered to buy beans from farmers at 45,000 dong ($2.15) per kg on Tuesday. Daklak's market priced the beans in a wider range between 44,600 dong and 45,800 dong a kg, against 45,000 to 45,500 dong on Monday.
Robusta stood at 40,200 to 40,900 dong in the week ending February 17, when domestic prices began to rise, according to Reuters data. London's May robusta contract rose $9, or 0.4 percent, to close at $2,190 a tonne on Monday, off an earlier high of $2,198, the highest level for the benchmark second month since October 2012. Traders said rising domestic prices could slow purchases by exporters, but there was little chance of delay because most of them had not committed to large forward shipments.