Vietnam coffee prices hit all-time high -traders

Vietnam coffee prices spike on the back of rising prices on the futures exchange

REUTERS

Published: 2011/05/04 11:52:08 AM

Vietnamese robusta coffee prices rose nearly 3% on domestic markets in the past week to an all-time high of 50 million dong ($2424) a tonne on Wednesday, tracking gains in London robusta futures markets, traders said.

Rising domestic prices help exporters build stock thanks to farmers’ sales, but the higher price squeezes exporters’ margin, making them hesitate to seal new deals, and this could lead to slowing shipments from the world’s top robusta producer.

Prices rose from 48,6 million dong a week ago in the top growing province of Daklak after London’s July contract increased $56 to close at $2611 per tonne, supported by New York arabica that rose to a 34-year high on Tuesday. [ID:nLDE74212A]

"Farmers are selling well because this price has reached their expectation," a trader in Ho Chi Minh City said.

Foreign buyers were seeking Vietnamese beans grade 2, 5% black and broken at discounts of $85-$90 a tonne to London’s July contract, widening from $75-$80 a tonne last week.

The wider discounts plus rising Vietnamese dong value against the dollar have made exporters reluctant to ink new deals, traders said.

The dong rose to 20630 per dollar on interbank markets on Wednesday from 20900 dong a month ago.

Vietnamese coffee prices surged 56% last year. With Wednesday’s gain, prices have advanced another 34,8% so far this year. $1=20630 dong)