Vietnamese coffee prices rose to the highest level in nearly three years on Monday, tracking higher global market levels, and a forecast dip in coffee exports this year could push futures prices up further.
Robusta coffee jumped more than 2 percent from last week to as high as 39.3 million dong ($2,016) a tonne on domestic markets on Monday, the highest since March 2008, traders said.
Exporters offered to buy beans at 39.1 million to 39.3 million dong a tonne in the top growing province of Daklak, up from 38.4 million dong last Monday and near the range of 39.4-39.5 million seen on March 6, 2008.
The price rise, which tracked a London futures market advance on Friday, encouraged farmers to hold on to beans from the recent harvest in anticipation of further gains.
Exporters were reluctant to sign new deals, fearing they could not buy enough locally, traders said.
March robusta coffee LRCH1 closed up $34 on Friday at $2,149 a tonne, buoyed by investor buying and a weak dollar.
"Farmers are selling a little here, a little there. They can sell one or two bags now but still have enough cash for expenses," a trader said by telephone after a market survey in Daklak.
"Exports are likely to slow further before the holiday," he added.
Domestic coffee markets are expected to close from Thursday and the export market from Saturday to prepare for Tet, Vietnam's biggest festival, which marks the Lunar New Year.
Vietnam closes all markets from Feb. 2 to Feb. 7 for Tet and the two days before have been made holidays, too, so the coffee market will not be fully open again until Tuesday Feb. 8.
Exporters sought to sell robusta grade 2, 5 percent black and broken at discounts of $140 to $150 a tonne to the May contract , placing the export grade at $2,025-$2,035 a tonne on a free-on-board basis.
LOWER EXPORT VOLUME IN 2011
Coffee exports from Vietnam, the world's second-largest producer after Brazil, could dip 1.8 percent this year from 2010 to 19.17 million bags, a state-run newspaper reported on Monday.
One bag contains 60 kg of coffee beans.
A forecast of no increase in coffee exports from Vietnam, the world's top producer of robusta beans, and slow sales this month could add to the pressure in the London market, where prices have risen because of interest from roasters and funds due to high arabica prices and tighter supply.
"With a stable coffee area and no changes in yield from now, there is a big possibility that the export volume of around 1.1 million tonnes a year could be kept for a long time," Dau Tu (Investment) newspaper said, citing an Industry and Trade Ministry projection and assessment by industry officials.
Revenue from coffee exports this year could rise 5 percent from 2010 to $1.8 billion, it said.
The projection is based on the calendar year ending December, while Vietnam's coffee crop year runs from October to September.
The trade ministry's projection is lower than a forecast from the Agriculture Ministry, which has forecast coffee exports would reach at least 1.28 million tonnes in 2011, with revenue rising 13.6 percent to $2 billion.
Vietnam has 548,200 hectares (1.35 million acres) of coffee under plantation, mostly in the Central Highlands, and robusta beans account for more than 95 percent of total production.
The harvest that ended last month, about two weeks earlier than usual, produced 18 million bags, down 1.1 percent from the previous harvest, the International Coffee Organization said. ($1=19,498 dong).
VNEconomyNews
(Source: http://www.coffeeasean.org/details.asp?Object=5&news_ID=28148183)
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