Vietnam’s April coffee exports fall to 5-month low

Shipments last month from Vietnam, the world’s largest robusta producer and exporter, fell 28.3 percent from the same month in 2016, the Finance Ministry-run Vietnam Customs said in its monthly report.

While the export volume was slightly above market expectations, it dropped to its lowest since November 2016, based on government data.

In the last week of April, Vietnamese coffee prices rose beyond ICE futures prices for the first time since September 2016 due to thin domestic stocks and a fast decline of futures prices, traders said.

Robusta beans grade 2, 5 percent black and broken stood at premiums of $20-30 a ton to London’s robusta July contract, narrowing from premiums of $45-$50. The futures contract ended down 0.4 percent at $2,020 per ton on Tuesday.

“(Foreign) trading firms have not bought anew,” a trader at a European firm in Ho Chi Minh City said. “Some foreign companies (in Vietnam) even have such high stocks that they are ready to resell to others for loading.”

The fall in export volume is a hit to a positive start to the year after March shipments rose to their highest since April 2016, placing the country ahead of top producer Brazil for the second time in a year.

The global coffee market continues to be well supplied, with exports in the first half of the 2016/17 crop year starting last October rising 4.8 percent from a year ago to 60 million bags, the International Coffee Organization (ICO) said in its April report released on Tuesday.

The Ho Chi Minh City-based trader said most domestic stocks are currently in the hands of export firms and foreign trading firms that have established warehouses in Vietnam, while farmers in the Central Highlands coffee belt are holding on to an estimated 10 percent of their harvest.

Vietnam’s 2017/2018 harvest is due to start in October.

“The supply outlook for 2017-18 seems increasingly positive,” the ICO report said, referring to global coffee production. However, it noted Brazil’s current low stocks, saying its supply could be at risk if the weather turns unfavorable.