There have been some sales in Vietnam's domestic coffee markets this week as growers unload stocks to cover expenses, although exports have not picked up strongly, traders said on Tuesday. The 2014/2015 harvest in Vietnam, the world's largest producer of the robusta bean that is mainly used to make instant coffee, has ended and growers could sell more in the run up to the Tet festival, to mark the Lunar New Year, in February.
"Farmers are selling moderately, while sales are slower in the main producing provinces of Daklak and Gia Lai where growers have better finances," a Vietnamese trader said by telephone from Pleiku, the capital of Gia Lai. Sales could pick up if prices rise to 42,000-43,000 dong per kg, he added.
Robusta edged up to 40,000-40,200 dong ($1.87-$1.88) per kg on Tuesday in Daklak, Vietnam's largest growing province, from 40,000 dong on Monday but was still below last week's range of 40,300-41,000 dong. Prices in Vietnam closely track London's futures market, which closed marginally higher on Monday, with March ending up $1 at $1,971 a tonne.
"There's been concern over farmers' slow sales, but our stock is sufficient for loading until after Tet," said Le Duc Huy, deputy general director at Simexco Daklak, one of Vietnam's top coffee exporters. Robusta grade 2, 5-percent black and broken was offered at discounts of $20-$40 a tonne to the ICE May contract, unchanged from last week. December coffee exports jumped 37.3 percent from the previous month to 115,400 tonnes, below market expectations, bringing the October-December volume to 295,200 tonnes, up nearly 7 percent from a year ago, government data showed.
With January shipments of around 150,000 tonnes forecast by traders, Vietnam will have exported 445,000 tonnes (7.4 million 60-kg bags) in the first four months of the current season, which ends in September 2015. Traders see output at 24 million to 29 million bags, below a US Department of Agriculture estimate of 29.4 million bags.