Vietnamese coffee premiums to global prices rose this week to the highest in nearly two years, tracking gains in London’s robusta futures market, but higher prices failed to stimulate domestic sales, traders said on Tuesday. Premiums have rallied after rain disrupted deliveries from plantations in Indonesia and as falling global prices last month prompted Vietnamese farmers to hold back beans.
On Tuesday, premiums of Vietnamese robustas to London’s September contract widened to $100-$130 a tonne, from $80-$120 a week ago, after the futures contract finished up $13, or 0.7 percent, at $1,822 a tonne on Monday. Premiums of Vietnamese beans were as high as $140 a tonne to London prices in early August 2011.
«While buying demand is not strong, premiums rising also make it difficult to reach a deal now,» a trader in Ho Chi Minh City said. On domestic markets, robusta rose to 38,400-39,100 dong ($1.80-$1.84) per kg in Daklak, Vietnam’s largest coffee growing province, from 37,400-38,100 dong a week ago.
Farmers, who may still have around 300,000 tonnes of beans in stock according to estimates by several traders, are targetting sales only when prices hit 40,000 dong per kg or higher. The stocks are spread among many farmers’ families, which has reduced selling pressure, but at the same time makes it harder for cash-starved exporters to buy in high volume, traders said.
Prices of the bitter beans used for making soluble coffee have fallen around 17 percent from a 22-month high struck in mid-March, leaving many exporters who bought at high prices facing losses. Vietnam will allow banks to triple the allowed lending period for coffee export companies to 36 months, giving exporters more time to repay debts after a steep fall in coffee prices, the government said.
Global coffee prices are still under downward pressure due to a weaker dollar and rising outputs in top producing nations Brazil, Vietnam and Indonesia, dealers said. World coffee production would rise 7.8 percent to 144.6 million 60-kg bags in 2012/13, taking it above consumption estimated at 142 million bags, the International Coffee Organisation said on Monday. For the 2013/14 crop, Vietnam’s output is forecast to rise around 10 percent to 27 million to 29 million 60-kg bags, traders in Vietnam said last Thursday.
Source: brecorder.com/agriculture-a-allied/183/1209734/
Vietnamese coffee premiums reach highest since August 2011
