Indonesia sidesteps coffee price tumble

Coffee growers in one major producing country are avoiding, somewhat, the market slump which has provoked losses and unrest among farmers in the likes of Brazil and Colombia.

Coffee prices in Indonesia, which may this year lose third-rank among global coffee growing countries to a revived Colombia, are holding well above those of the international market, where futures in both arabica and robusta beans have set multi-year lows this month.

"Current domestic robust and arabica prices stand at $2 per kilogramme and $5 per kilogramme respectively," the US Department of Agriculture bureau in Jakarta said.

That is equivalent to $2,000 per tonne for robusta beans, which for January delivery were trading at $1,615 a tonne in London on Thursday.

For arabica, the price is equivalent to more than 220 cents a pound – twice the price of New York futures.

Taste for coffee

The price resilience reflects in part a disappointing harvest, seen falling 1.0m bags to 9.5m bags this year, hurt by dry weather during flowering and excessive rains during fruit formation, although the decline would have been worse were it not for a good result from the country's "fly" harvest picked early in the calendar year.

Indeed, the decline in overall production was 300,000 bags fewer than the USDA bureau had originally anticipated.

However, Indonesians are also increasingly drinking more of what they produce, with Starbucks boasting nearly 150 coffee bars in the country, and the Excelso chain more than 100 outlets.

"The annual domestic consumption continues to increase, largely due to Indonesia's growing middle class," the bureau said.

Exports drop

Indonesians are expected by the bureau to consume a record 2.5m bags of coffee in 2013-14, 30,000 bags more than the official USDA forecast, and nearly twice as much as demand at the turn of the century.

Indeed, with output falling year on year, Indonesia is one country expected to see lower exports in 2013-14, down 12% year on year to 7.8m bags.

And even that assumes inventories ending the season at just 48,000 bags, which would be the lowest in at least 50 years.

Coffee price rally 'may not last long'

Investors were warned against expecting a continued recovery in coffee prices, even as robusta beans strengthened their foothold back over $1,600 a tonne, while arabica futures sought their first three-day winning streak since early October.

Commerzbank said that the "restraint" exercised by robusta coffee sellers in Vietnam, the top producer of the variety, may continue to support London-traded futures in the short term.

Vietnam's exports fell 34% to 61,100 tonnes in October, the first month of the 2013-14 crop year, below an initial forecast of 65,000 tonnes, the country's official statistics office said on Wednesday, driving futures up 2.4%.

"Estimates for November [exports] are likewise well below their year-on-year equivalents," the bank said.

The declines defy an ongoing harvest which looks like ending up at a record 1.7m bags, and would be expected to weigh on prices.

'We anticipate a correction'

"It is likely that the short-term-oriented financial investors active on the market will further cut their net short positions," giving extra support to futures for now, Commerzbank said.

Speculators in robusta coffee cut their net short position – the extent to which short bets, which profit when values fall, exceed long holdings, which benefit when prices rise – by 2,302 lots to 8.490 lots in the week to November 19.

However, the extent of Vietnam's harvest will weaken the discipline among robusta sellers, boosting exports and undermining prices.

"We remain sceptical about whether Vietnam will continue to be able to withhold exports for any prolonged period," the bank said.

"We anticipate a correction in the foreseeable future, assuming the prospect of a record crop does not change."

SocGen outlook

Separately, Societe Generale downgraded its forecast for arabica coffee futures to levels below the futures curve, albeit not foreseeing any lasting drop below 100 cents a pound for the first time since 2006, as some other commentators such as Macquarie have done.

With Colombia's output recovering strongly, as trees mature which were put in during a campaign to replant with varieties resistant to coffee rust, and Brazil set in 2014 for an "on" year in its cycle of higher and lower producing years, these extra supplies "will only add to the global surplus", SocGen analyst Christopher Narayanan said.

The bank raised by 1.2m bags to 5.6m bags its forecast for the world production surplus in 2013-14, raising its estimate too for the surplus last season, by more than 900,000 bags to 10.9m bags.

"We maintain that tightening will not be seen until at least the 2015-16 marketing year, barring any significant drop in Central American coffee production due to leaf rust disease," Mr Narayanan said.

ICE Coffee Languishes, Corrective Pattern -- Technical Analysis

Kira Brecht

  ICE March coffee futures are trading quietly Wednesday as the market

consolidates in a minor corrective pattern following the new contract low hit

early in the month. The short-term outlook is choppy and sideways, but the

longer-term trend remains firmly bearish.

  ICE March coffee recently traded down 25 points at $1.0850 a pound.

  Since hitting a new contract low at $1.0415 on Nov. 6, the ICE March coffee

contract has rebounded higher with a minor series of higher highs and higher

lows. The corrective strength hit a peak at $1.1200 on Nov. 22 and that remains

important nearby resistance for the market. The coffee market has stalled just

below 40-day moving average resistance in recent days, which comes in at

$1.1202 on Wednesday.

  For months now, the 40-day moving average has acted as strong resistance on

minor counter-trend rally moves in the coffee market. While minor breaches have

been seen of the 40-day moving average, they have been short lived. Traders can

continue to look at that zone as strong nearby resistance.

  Daily momentum has flat-lined, with the nine-day relative strength index at

48% on Wednesday. Momentum is neutral and not showing a strong trend.

  Near-term support lies at $1.0615, the Nov. 25 low. If the market took that

floor out the bears would look to push back toward the contract low.

  Overall, conditions are uninspired and volatility has fallen in recent days.

The market is in the midst of quiet pre-holiday trade and liquidity conditions

are likely thin.

  The market is in a corrective phase following the steep and steady sell-off

from mid October. The consolidation could have some more time on the clock.

  Shifting out to the monthly continuation chart for ICE coffee, major

long-term support lies at the December 2008 swing low at $1.0170. That remains

a longer-term objective for the bears. But the market is languishing and not

exhibiting strong momentum, so it may be days or weeks before the bears regain

momentum for a test of lower levels.

Brazil Is Studying More Coffee-Support Measures, Official Says

  SAO PAULO  -  The Brazilian government is studying more measures to help coffee

growers, who are dealing with about $2.36 billion in debt, an official from the

agriculture ministry said Wednesday.

  As prices for arabica coffee, the mostly widely grown variety, trade near

seven-year lows, Brazil's government has taken steps to support the coffee

industry, which produces about 2% of the nation's total exports by value.

  The government's latest effort was last week, when it suspended loan payments

for coffee producers. But farmers say the move doesn't do enough.

  Grower groups would like to see the government establish a strategic coffee

stockpile, let growers pay debts with coffee and provide more financing options

for mechanization.

  "We're looking at all the proposals; nothing has been ruled out yet," Janio

Zeferino, director of the Agriculture Ministry's coffee department, told The

Wall Street Journal.

  More measures will be implemented if the most recent moves don't boost

prices, Mr. Zeferino said. He couldn't say how long the government would wait

before deciding if more is needed, adding any new steps would be announced

"when appropriate."

  Arabica coffee traded on the ICE Futures U.S. exchange is down about 25% this

year, trading at $1.0810 a pound Wednesday. Futures rose as high as $1.12 a

pound last week in anticipation of what the government would propose, but

prices quickly pulled back after the debt-payment suspension was announced.

  Producers said the debt measure deals only with the effects of low prices,

not the price itself. Coffee growers have been taking on debt while they wait

to sell their beans at higher prices.

  Mr. Zeferino estimated that coffee farmers owe 6 billion reais.

Robusta Coffee Falls After Biggest Rally in 7 Weeks; Cocoa Rises

Isis Almeida - 2013-11-25

Robusta coffee fell for a second day in London after rallying the most in seven weeks last week on falling stockpiles and slow exports from Vietnam, the world’s largest producer. Cocoa advanced.

The beans used to make instant coffee and espresso gained 4.3 percent through Nov. 22, the most since the seven-day period ended Oct. 4. Inventories in warehouses monitored by NYSE Liffe slid 8 percent in the two weeks to Nov. 11, while shipments from Vietnam are forecast at 94,000 metric tons this month, data from the Ministry of Agriculture and Rural Development showed, 23 percent lower than a year earlier. Prices slid 1.4 percent in the last trading session.

“We don’t think that the story is over with robusta, but last session certainly cleared the decks,” Toby Donovan, a broker at BGC Partners LLC in London, said by e-mail. “Prices rallied last week on speculative short covering, low certified stockpiles, with expectations of further inventory draw-downs, given weight by the lack of coffee coming out of Vietnam.”

Robusta coffee for January delivery slid 0.6 percent to $1,567 a ton by 10:34 a.m. on NYSE Liffe in London. Arabica coffee for March delivery fell 0.6 percent to $1.069 a pound on ICE Futures U.S. in New York. Arabica futures trading volumes were 24 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

Robusta inventories in NYSE Liffe-monitored warehouses stood at 48,770 tons as of Nov. 11, data from the bourse showed. That’s lower than the 52,000 tons predicted by traders in August in a Bloomberg survey for the end of the year. Vietnamese shipments were 122,000 tons in November last year, according to data from the ministry. The season there started on Oct. 1.

Cocoa Gains

“Producing countries are expected to keep selling above $1,600 a ton and the bulls will certainly have some work to do in order to clear them,” Donovan said.

Refined, or white, sugar for delivery in March was unchanged at $464.10 a ton on NYSE Liffe. Raw sugar for delivery in March gained 0.1 percent to 17.42 cents a pound on ICE.

Cocoa for delivery in March advanced 0.2 percent to 1,769 pounds ($2,865) a ton in London. In New York, cocoa for March delivery rose 0.1 percent to $2,803 a ton.

Brazil to Announce Measures to Aid Coffee Growers Friday

  SAO PAULO  -  The Brazilian government will announce Friday a package of

measures intended to help coffee growers cope with low prices, a spokesman for

the agriculture ministry said.

  Brazil's agriculture minister, Antonio Andrade, will hold a news conference

at 1600 GMT Friday to provide details on the measures, the spokesman said.

  Coffee growers have been seeking government assistance for months, as the

price for arabica beans, the most widely grown variety of coffee, has been

sliding. Earlier this month, arabica futures traded on the ICE Futures U.S.

exchange dropped to seven-year lows, pushed down by expectations for a record

harvest in Brazil and for big harvests in other exporting countries such as

Colombia and Indonesia.

  In August, the government introduced some measures intended to help,

including selling options contracts for delivery in April and offering to buy

coffee right away at the official minimum price, but farmers say those measures

have been ineffective.

  "If farmers had that kind of financial muscle" to wait until April delivery,

"then they wouldn't need the government's help," said Francisco Ourique,

superintendent of coffee for the Cooparaiso cooperative that represents more

than 2,500 growers.

  More recently, growers groups presented the government with a "Coffee Pact,"

a series of measures intended to help cut farmers' debt and raise prices in

world markets. Proposals included a moratorium on debt payments, letting

farmers pay their debts with coffee and having the government establish a

strategic stockpile of beans to help regulate prices.

  Growers gave the government until Nov. 14 to act, but the government missed

that deadline, saying it was considering what action to take. Friday's

announcement is expected to be a response to the Coffee Pact.

  Growers groups have said farmers are taking a loss on every 132-pound bag

they sell, and some can't afford the maintenance required to maximize coffee

production in their fields. That could lead to smaller crops in the future.

  Brazil is the world's biggest producer of coffee.

REUNIÃO VIRTUAL DO CMN FICA PARA A MANHÃ DESTA SEXTA-FEIRA

A reunião virtual do Conselho Monetário Nacional (CMN),

marcada para esta quinta-feira, ficou para a manhã desta sexta-feira,

provavelmente, segundo fonte do Ministério da Fazenda. No setor café, a

expectativa é total pela aprovação de voto prorrogando por 120 dias as

dívidas vencidas e vincendas a partir de 1 de novembro. Também são

aguardadas outras medidas.

    Segundo a fonte do Ministério da Fazenda, por problemas de agenda dos

membros do CMN não houve a votação dos itens pelo sistema eletrônico. Assim,

a reunião virtual por esse meio ficou para esta sexta-feira.

    O Ministério da Agricultura, Pecuária e Abastecimento (Mapa), por sua

vez, anunciou pela assessoria de comunicação que o ministro Antônio Andrade

anuncia nesta sexta-feira, 22 de novembro, medidas de apoio ao setor cafeeiro

às 14 horas, no auditório maior do Mapa.

Café tem dia de altas na ICE, mas março se fixa próximo dos 110 cents

  Os contratos futuros de café arábica negociados na ICE Futures US encerraram esta quarta-feira com altas, devolvendo integralmente as perdas registradas ao longo do pregão anterior. O dia foi relativamente calmo, após o início do período de notificação do dezembro. As ações estiveram fundamentadas em compras especulativas, com o março voltando a flutuar próximo do nível psicológico de 110,00 centavos. Algumas tentativas de ganho mais efetivos foram até observadas, mas no nível de 111,00 cents novas vendas e realizações foram registradas. Os preços ao longo do dia atingiram o maior nível desde 28 de outubro, entretanto, o mercado ainda se mostra sobrevendido e as correções, como a registrada na última sexta-feira, ainda são pontuais, não dando sinais de que uma mudança consistente de cenário possa ser produzida, ao menos no curto prazo.

As ações do mercado continuam focadas na questão da disponibilidade de café. Ainda que o Vietnã venha atravessando dificuldades para escoar sua safra ou para a secagem dos novos grãos, isso não afeta o quadro mais completo de oferta do produto, que prevê um Brasil com uma safra de 2013 considerada muito boa e uma produção em 2014 que poderá ficar próxima do recorde do país, ao passo que a "adormecida" Colômbia voltou a ter uma safra consistente, depois de um amplo programa de renovação de lavouras. Já o Vietnã, mesmo com tais problemas, deverá injetar muito café robusta no mercado, uma vez que os problemas climáticos neste período do ano são constantes nessa nação asiática.

No encerramento do dia em Nova Iorque, a posição março teve alta de 165 pontos, com 110,20 centavos de dólar por libra peso, com a máxima em 111,35 centavos e a mínima de 108,30 centavos, com o maio registrando ganho de 165 pontos, com 112,45 centavos por libra, com a máxima em 113,40 centavos e a mínima em 110,70 centavos. Na Euronext/Liffe, em Londres, a posição janeiro teve alta de 16 dólares, com 1.579 dólares por tonelada, com o março tendo valorização de 19 dólares, para o nível de 1.569 dólares por tonelada.

De acordo com analistas internacionais, o dia na bolsa nova-iorquina foi de poucas novidades, com as perdas registradas ao longo da terça-feira sendo repostas, após algumas aquisições especulativas. O mercado externo operou nesta quarta-feira especulando sobre o posicionamento do Federal Reserve, a ser apresentado no jantar anual do Clube dos Economistas em Washington. O presidente do banco central norte-americano, Ben Bernanke deu sinais de que as taxas de juros nos Estados Unidos podem continuar baixas, mesmo com a taxa de desemprego local ficando abaixo dos 6,5%. Essa seria uma sinalização de que os juros continuarão em um nível mínimo mesmo com a redução do programa de compra de títulos, que é um dos pilares para altas em vários segmentos do mercado atual. Após tais sinalizações, o dólar voltou a subir em relação a várias moedas internacionais, mas as bolsas de valores nos Estados Unidos tiveram poucas oscilações.

"O café passou ao largo dos mercado externos nesta quarta-feira. Tivemos, durante parte do dia, uma preocupação mais efetiva com o anúncio do Federal Reserve, o que respingou em algumas commodities. Mas o café, ainda sobrevendido, continua a fazer uma trajetória própria, pressionado, principalmente, com a questão da oferta abundante do grão e dos estoques ainda relativamente bem consistentes", disse um trader.

O Ministério da Agricultura e Desenvolvimento Rural do Vietnã informou que tenta viabilizar o financiamento para exportadores de café do país, objetivando a estocagem de aproximadamente 300 mil toneladas do grão. O foco é ajudar na sustentação dos preços. Luong Van Tu, presidente da Associação de Café e Cacau do Vietnã, ressaltou que os exportadores de café locais estão solicitando empréstimos subsidiados por parte do governo para armazenar o café da safra 2013/2014. O momento para esse tipo de procedimento é agora, já que as compras para formação de estoques ocorrem no primeiro semestre de cada exercício.

As exportações brasileiras no mês de novembro, até o dia 19, totalizaram 861.851 sacas de café, alta de 2,33% em relação às 842.158 sacas embarcadas no mesmo período do mês anterior, de acordo com informações do Cecafé (Conselho dos Exportadores de Café do Brasil).

Os estoques certificados de café na bolsa de Nova Iorque tiveram queda de 575 sacas, indo para 2.692.618 sacas. Tecnicamente, o março na ICE Futures US tem resistência em 111,35, 111,50, 112,00, 112,40-112,50, 113,00, 113,50, 114,00, 114,50, 114,90-115,00, 115,50, 116,00 e 116,50 centavos de dólar, com o suporte em 108,30, 108,00, 107,50, 107,00, 106,50, 106,00, 105,50, 105,10-105,00, 104,50, 104,00, 103,50, 103,00 centavos.

Londres analisa questões relativas ao Vietnã e volta a ter alta

  Os contratos futuros de café robusta negociados na Euronext/Liffe encerraram esta quarta-feira com altas, em uma sessão com um volume dentro da média atual da casa de comercialização britânica. A posição janeiro flutuou, ao longo de todo o pregão, acima do nível psicológico de 1.500 dólares por tonelada.

De acordo com analistas internacionais, o dia foi caracterizado por compras especulativas, que permitiram ao janeiro ampliar ainda mais os ganhos iniciados ao final da semana passada. As especulações sobre o Vietnã continuam efetivas e dão sustentação para os ganhos. O país sofre com uma temporada de chuvas que, se não afeta diretamente as plantações, faz com que o processo de secagem se torne bastante moroso. Desse modo, novos cafés do país continuam a demorar a chegar às mesas de comercialização. Por sua vez, o mercado comentou efetivamente a declaração de um grande dirigente da principal entidade cafeeira do Vietnã, que apontou que o país busca mecanismos para financiar exportadores para que eles restrinjam a venda do grão, em busca de preços mais consistentes.

"São notícias que mobilizam os players e dão algum alento aos preços. Evidentemente, que uma retenção por parte dos vietnamitas ainda estão no campo das especulações, sendo que, por outro lado, a questão do clima tem uma reação imediata nos terminais e boa parte desse ganho do curtíssimo prazo está atrelado a ele", disse um trader.

O janeiro teve uma movimentação ao longo do dia de 8,20 mil contratos, contra 5,03 mil do março. O spread entre as posições janeiro e março ficou em 10 dólares. No encerramento do dia, o janeiro teve alta de 16 dólares, com 1.579 dólares por tonelada, com o março tendo valorização de 19 dólares, para o nível de 1.569 dólares por tonelada.

Liffe Coffee Gains on Vietnam Stockpiling Move -- Market Talk

Liffe robusta-coffee futures continue to rise, boosted

by news that Vietnam's agriculture ministry is attempting to push through

measures to help coffee exporters stockpile beans. According to an official

with the Vietnam Cocoa and Coffee Association (Vicofa), the agriculture

ministry is seeking the prime minister's approval to lend money to coffee

exporters so they can store about 20% of their beans until prices rise. Vietnam

is the world's largest grower of robusta coffee, a variety used primarily in

instant-coffee blends. While the Vietnam news "provided the narrative" for an

initial price rise, short-covering has helped accelerate the move, says a

broker. January robusta rises 0.4% to $1,597/ton

Produção na América Centra provavelmente  deve cair acentuadamente

  A produção de café na América Central provavelmente deve cair acentuadamente no ciclo 2013-2014 devido a praga da ferrugem fungo, juntamente com os preços mais baixos irão causar dores de cabeça para o setor , segundo especialistas reunidos neste fim de semana em Costa Rica . O pior surto de ferrugem fungo desde que ele chegou na América Central em 1976 está causando estragos nas plantações da região, reduzindo a produção em vários países , e é provável que continue durante anos afetações . Pressionado por abundantes suprimentos globais , os futuros de arábica estão perto de um quilo e 2013-2014 safra pode cair abaixo desse nível , disse Keith Flury , especialista em agricultura do BNP Paribas , o SINTERCAFE conferência . Nils Leporowski , presidente da Associação Nacional do Café da Guatemala, disse na conferência , realizada em Playa Herradura , que a produção da Guatemala iria cair 3 por cento no período 2013-2014 para 2,9 milhões de sacas de 60 quilos , após uma queda de 15 por cento em relação ao período anterior . Ele acrescentou que a safra de café na Guatemala recuperar totalmente até que o ciclo 2015-2016 . Por sua parte , o presidente do Instituto do Café da Costa Rica, Xinia Chaves disse que a produção do país da América Central poderá cair 18 por cento em 2013-2014 em comparação com o ciclo anterior , para 1,42 milhões de sacas de 60 quilos . Separadamente, Jorge Atilio , Procafé diretor, disse que El Salvador veria uma queda de 36 por cento na produção de café em relação ao mesmo período de 843.000 sacas de 60 quilos. A ferrugem aparece como esporos de laranja na parte inferior das folhas infectadas que, eventualmente, se transformar em preto e cair , eventualmente , que mata ou enfraquece reduz significativamente árvore afeta a produtividade e qualidade dos grãos. Mas, mesmo quando os governos e compradores se uniram para arrecadar fundos e combater a ferrugem , o colapso dos preços do café nos últimos anos criou uma "tempestade perfeita" para os produtores , de acordo com Chaves. " Nós nunca vimos os produtores tão desesperadas ", disse ele . Alonso Chacon , vice-presidente de CoopeTarrazú , uma cooperativa com 3.000 membros estimados para produzir mais de oito milhões de quilos de café no ciclo 2013-2014 , disse que o grupo escapou de um golpe de ferrugem , graças a uma alta altitude ea saúde de suas plantações. No entanto , a obtenção de financiamento foi um grande desafio . "Os agricultores não podem lidar com dois anos de dívida", disse ele. "Este ano estamos vendo um impacto de ferrugem , mas os preços no próximo ano poderia " afetar acrescentou.

Cápsula a cápsula, a Nespresso mudou a nossa forma de tomar café

Zara Soares Nogueira

O português gosta de café, tanto que Portugal já figurou no top 10 da Nespresso. A líder mundial no segmento de cápsulas celebra dez anos no mercado nacional com o lançamento de uma nova edição limitada, o Ciocorrosso.

Quando a primeira loja Nespresso abriu no Chiado, em Lisboa, em 2003, a euforia portuguesa manifestou-se na forma de filas intermináveis que durante semanas encheram a Rua Garrett. Passados dez anos, a marca que George Clooney pôs nas bocas do mundo conta com onze lojas em Portugal e já faz parte do quotidiano do bom português, amante de café.

Desde o seu início, em 1986, que a marca afirma que “Nespresso não é apenas café. É uma experiência genuína que combina perfeição e prazer, simplicidade e estética”, como descreve o comunicado enviado às redacções. Com “perfis únicos de sabor e aroma”, os cafés Nespresso valem à Nestlé, empresa que detém a marca, vendas que sobem em média 30% por ano e renderam, em 2011, três mil milhões de francos suíços (quase cinco mil milhões de euros).

E Portugal era, em 2010, um dos países no “top 10” de lucro a nível mundial. Perante a crise económica, as vendas já não as mesmas mas o nosso país tem mostrado sinais de recuperação, como revela o relatório oficial de contas dos últimos nove meses do ano da Nestlé. Mas, para a marca, o dinheiro não é tudo. O seu compromisso ecológico com o planeta é uma das máximas de marketing da Nespresso: responsabilidade ambiental no fornecimento de café, na reciclagem das cápsulas e na redução da pegada de carbono.

E mantendo esse espírito de criar o melhor café do mundo sem ser a custo do planeta, a Nespresso oferece neste Natal o Ciocorrosso, uma edição limitada escolhida através de uma votação online pelos Club Members da marca. A nova linha “revela o casamento requintado e perfumado das notas torradas do Grand Cru Livanto com um delicioso chocolate negro e o aroma refrescante de frutos vermelhos”.

O Ciocorrosso já está disponível nas lojas Nespresso com o valor de €0,425 por cápsula.

Vicofa Chairman: Looking to Stockpile 300,000 Tons of Coffee

Vu Trong Khanh

  HANOI--Vietnam's Ministry of Agriculture and Rural Development is seeking

financial assistance from the government for coffee exporters to stockpile up

to 300,000 metric tons of coffee to support prices, an official with the

Vietnam Cocoa and Coffee Association, or Vicofa, said Wednesday.

  Vietnam is the world's largest grower of robusta coffee beans used primarily

to make instant coffee blends.

  The Agriculture Minister, Cao Duc Phat, said Tuesday his ministry had sent a

request to the government.

  Coffee exporters are seeking soft loans from the government to purchase the

coffee beans of the 2013-14 crop year for stockpiling, Vicofa Chairman Luong

Van Tu told The Wall Street Journal, adding that the purchases would take place

in the first half of 2014.

  "We have approached the State Bank of Vietnam for this issue, and the central

bank governor has said he supported the plan to stockpile coffee," Mr. Tu said.

  Mr. Tu said the move is necessary to help exporters hold the beans for a

longer period of time to wait for better prices, given that the current prices

are too low for exporters and farmers to make profits.

  "If prices stay low for a long time, farmers will stop watering and

fertilizing their coffee trees and ultimately cutting them off for growing

other crops," Mr. Tu said.

  He said Vietnam's coffee exports in the 2013-14 crop year is expected to be

around 23.5 million 60-kg bags, equivalent to the previous crop year.

  Data from the Vietnam General Customs Department showed the country's coffee

exports in the 2012-13 crop year that ended September 30 totaled 1.42 million

metric tons, down from 1.56 million tons a year earlier.

  Mr. Tu said the recent floods triggered by the Podul storm that hit Vietnam

last week will delay the harvest of the new crop year, adding that harvest will

peak from December, instead of mid-November as in the previous crop years.

  "The floods have also caused severe damages to coffee trees in south central

provinces," Mr. Tu said.

  He said the increase in the processing capacity of domestic coffee plants

will eat into the overall coffee beans available for exports this crop year.

  "Local coffee processing plants, including those of Nestle, Olam, Vinacafe,

Me Trang and Phuong Vi, will take a proportion of 6%-7% of Vietnam's total

coffee output in the 2013-14 crop year, up from 5% in the previous crop year.

Robusta coffee extends revival. Arabica struggles

Robusta coffee futures extended their revival, as Vietnam came closer to a deal which could stockpile some 20% of the domestic harvest, but arabica prices, which have defied expectations of a drop below 100 cents a pound, could not keep up their recovery.

Vietnam's farm ministry has "signed today for submitting to the government" plans for the state to buy-up robusta coffee in an effort to support the domestic industry Cao Duc Phat, agriculture minister, told the country's National Assembly.

Vietnam is the top producer of robusta coffee, a crop which is a huge support for the country's rural economy besides being a major export earner, with shipments in 2011-12 valued at $3.4bn.

While Mr Phat did not specific the volumes the ministry wishes to see stockpiled, reports have previously talked of some 300,000 tonnes, equivalent to about 20% of the expected 2013-14 harvest currently in progress.

'Coffee is being withheld'

The move added to the upbeat factors which have lifted robusta coffee futures from a three-year low of $1,431 a tonne, for a nearest-but-one contract, reached by London's January contract on November 7.

A 40% slump year on year in Vietnam's coffee exports last month to 61,100 tonnes (1.02m 60-kilogramme bags) is being by some commentators as a sign already of squeezed supplies, rather than soft demand.

Commerzbank analysts on Tuesday termed the decline "an indication that coffee is being withheld in a bid to shore up the price, and that the state is planning to stockpile coffee".

The fall in Vietnam's exports was mirrored by a decline in inventories held in London for delivery against robusta futures, to 48,770 tonnes as of November 11, down from 53,020 tonnes two weeks before.

Storm damage

Robusta prices have also obtained support from reports of the Vietnam's harvest, which has been expected to hit 27m-29m bags, being threatened by heavy rains, which have at least delayed cherry picking and likely reduced quality and quantity too.

"There were concerns that rainfall in Vietnam adversely affected the drying of the crop as well as affecting the trees," Vanessa Tan at Phillip Futures said, if adding that "it remains to be seen how much damage was inflicted on the crop".

Meanwhile, arabica prices have gained support from the strong performance of robusta beans and estimates by Costa Rica coffee researchers that the outbreak of roya fungus in Central America could see the region's output fall a further 12%, after a 20% drop last season.

They also put a recovery in arabica prices to 200 cents a pound on the cards next year, thanks to the impact of the current low prices in undermining investment in plantations.

"Coffee prices are currently finding support from several sides at once – a rare occurrence in recent months," Commerzbank said.

Colombia upgrade

However, an early rebound in arabica prices on Tuesday ran out of steam as an upgrade to the crop in Colombia crop, the world's second biggest producer of the variety, told.

The Colombian coffee producers' federation, Fedecafe, late on Monday raised by 1m bags to 11m bags its forecast for domestic output in 2013.

"Weather has been fine for the harvest, and we see good conditions for flowering," Luis Genaro Munoz, the Fedecafe general manager, said.

Phillip Futures' Ms Tan said: "Fundamentally, supply fundamentals of the arabica coffee market still appears to be bearish," facing "an oversupply".

The broker forecast that the bean's "bearish fundamentals" will push prices below 100 cents a pound.

Arabica futures for March stood 0.5% lower at 108.95 cents a pound in New York at 08:00 local time (13:00 UK time), when London robusta for January was 0.5% higher at $1,573 a tonne.