Vietnam coffee-sales steady; buyers await Indonesia arrivals
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Vietnam’s coffee sales may pick up if prices maintain their recent uptrend, but buyers are likely to await the upcoming harvest in Indonesia for better deals on fresh arrivals, traders said on Tuesday.
Coffee exports this month from the world’s biggest robusta producer are forecast to be in a wide range of 120,000 to 160,000 tonnes (2.0 million and 2.67 million 60-kg bags), versus an estimated 160,000 tonnes in April, traders said.
The ICE July robusta contract has risen nearly 4 percent so far this month to $1,649 a tonne, and Vietnamese robusta prices also gained 2.4 percent in domestic markets during the same period.
Robusta prices on Tuesday rose to 35,400-35,500 dong ($1.59) per kg in Daklak, Vietnam’s biggest growing province, from 34,800-34,900 dong a week ago, and 34,600 dong at the end of April.
Prices eased slightly from 35,600-35,900 dong per kg on Monday, of which 35,900 dong was the highest level since Nov. 12, 2015, according to Reuters data.
“The trend is that prices are rising and if it stays that way, more selling is expected this month,” said Phan Hung Anh, deputy director of export firm Anh Minh in Daklak.
Traders said buying demand has been steadily declining, given that Vietnam has supplied a significant volume of coffee to the world so far in the current 2015/2016 season.
The country exported an estimated 976,200 tonnes between October 2015 and last month, up 27.4 percent from a year ago, based on government statistics.
“Buyers are waiting to see Indonesia’s crop arrivals, and prices of the fresh beans (there) may become more attractive,” Anh said.
As futures prices edge up, premiums of Vietnamese robusta grade 2, 5 percent black and broken eased to $30-$40 a tonne to the July contract this week, from premiums of $50-$55 a week ago.
The coffee crop harvest in Vietnam’s rival – Indonesia – is expected to pick up pace in June, about a month later than usual, due to El Nino-related dry weather.
Indonesia’s 2016/2017 coffee output is forecast to drop around 9 percent as compared with last year to 9.65 million bags, while Vietnam’s output could edge up 3 percent to 29.14 million bags, BMI Research, a Fitch Group company, said in a report in late April.
Questions & Answers
Q.Why might coffee sales from Vietnam increase this month?
Why might coffee sales from Vietnam increase this month?
A.
Coffee sales from Vietnam may pick up this month if prices continue their recent upward trend. Traders suggest that if prices remain high, more selling is expected.
Q.What is the forecast for coffee exports from Vietnam this month?
What is the forecast for coffee exports from Vietnam this month?
A.
Coffee exports from Vietnam this month are forecast to be between 120,000 to 160,000 tonnes. This range compares to an estimated 160,000 tonnes in April.
Q.Why are buyers waiting for Indonesia's coffee harvest instead of buying from Vietnam?
Why are buyers waiting for Indonesia's coffee harvest instead of buying from Vietnam?
A.
Buyers are waiting for Indonesia's coffee crop arrivals because they anticipate better deals on fresh beans there. Purchasing demand has been declining in Vietnam.
Q.How has the robusta contract price changed recently?
How has the robusta contract price changed recently?
A.
The ICE July robusta contract has risen nearly 4 percent so far this month, reaching $1,649 a tonne. Vietnamese robusta prices also gained 2.4 percent in domestic markets.
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