Tuesday, 08 September 2015 18:12
HANOI: Vietnamese coffee exporters have been seeking to sell robusta beans to free up warehouse space ahead of the 2015/2016 season and some growers have also started unloading stocks as their hope of price gains have been dashed, traders said on Tuesday.
Vietnam, top global robusta producer, starts its new coffee crop year next month, with the harvest expected to peak from late November amid coffee prices that remain under pressure.
The November London robusta contract closed $ 19 or 1.19 percent down at $ 1,581 per tonne on Monday, within sight of a more than three-month low touched last week.
Robust futures, which have lost 17 percent so far this year, could hit $ 1,815 a tonne at the year end, based on traders’ forecasts in a Reuters poll on July 24.
But the traders also said any further weakening in Brazil’s real currency against the dollar could limit a recovery.
The real has lost nearly 20 percent against the dollar since July 24, hitting a 12-year low in late August – when arabica coffee on ICE Futures US also fell to its lowest levels in more than 1-1/2 years.
Robusta eased to 35,200-35,700 dong ($ 1.57-$ 1.59) per kg on Tuesday in Daklak, Vietnam’s key growing province, from 35,300-36,000 dong late last week.
Domestic sales are expected to pick up in coming weeks given the lack of any sign of price support, traders said.
Many Vietnamese speculators and some wealthy farmers began stockpiling beans in late February when prices were at around 40,000 dong per kg, hoping prices would gain further.
But coffee prices in Vietnam, which closely track the robusta futures market in London, have been weakening since.
Growers and speculators “will be selling as the hope of price gains is over,” a Vietnamese trader in Daklak said. Premiums for Vietnamese robusta beans grade 2, 5 percent black and broken widened to $ 60-$ 80 a tonne to the November contract, from $ 65-$ 70 last week, while bids were seen at around $ 30 a tonne.
“We could not sell much in the past month,” said a Vietnamese exporter in Daklak. “With weak buying now, most exporters will retain beans for October, as fresh beans will only be available from November.”
Vietnam could export around 90,000 tonnes in September, on par with shipments last month, traders have forecast.
