Vietnam coffee exports likely to decline this month

Reuters - October 02, 2013

HANOI: Vietnam’s coffee exports in October could drop by nearly a third from the previous month as low domestic prices at the start of the new season would discourage farmers to sell their stocks, two traders at foreign firms said on Tuesday.

The drop in exports from the world’s largest robusta producer may temporarily alleviate pressure on global prices of the coffee variety which tested three-year lows last week.

Supplies from Vietnam, however, are expected to rise later this month and become ample in early November at the peak of the harvest, raising output and likely keeping a lid on global prices.

October’s exports are forecast at 50,000-60,000 tonnes (0.83 million to 1.0 million bags), down from 70,000 tonnes in September, with most of the deliveries coming from the previous crop, the traders at foreign companies said.

“At the current prices Vietnam will sell less,” one trader said by telephone from Ho Chi Minh City, Vietnam’s biggest coffee trading market.

Coffee prices fell to 35,300 dong ($1.67) per kg on Monday in Vietnam’s Central Highlands main growing region, the lowest since late December 2010. That is well below a key level of 40,000 dong per kg at which farmers could sell more quickly.

Prices recovered slightly on Tuesday following gains in the London robusta futures market, rising to 35,700-36,000 dong per kg, after the November contract settled up 1.9 per cent at $1,642 a tonne.

The London price gained after touching a three-year low on Friday on expectations of a large harvest in Vietnam.