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Vietnam's coffee trade scant as farmers hold stocksThursday, August 28, 2014 > 08:50:29
Vietnam's coffee market has seen limited activity this past week as farmers held back dwindling stocks, with uncompetitive prices keeping buyers on the sidelines or looking for better deals elsewhere, traders said on Tuesday. A large part of supplies from the current crop were already committed and new contracts were hard to come by, as lower prices from top exporter Brazil held buyers' interest.
"The market has been really quiet for a month as importers won't take Vietnam shipments over Brazil's lower prices, while dealers and exporters don't have stocks to sell," one trader said. "Dealers and exporters, whose current stocks have all been committed on signed deals, now have few fresh beans to make any new trade as farmers won't release stocks until the price goes above 40,000 dong," the trader said.
Domestic robusta prices edged up to 39,000-39,500 dong ($1.84-$1.86) per kg on Tuesday in Vietnam's Central Highlands coffee belt, from 37,900-38,900 dong a week ago . The rise tracked gains in London's November robusta contract over the last week. "Farmers are not in much need for money now, as planting expenses would not surge until the Tet holiday," said another trader who is based in Daklak, Vietnam's largest coffee growing province. Tet is Vietnam's Lunar New Year holiday that usually falls in late January or early February. Coffee exports from Vietnam, the world's biggest producer of robusta beans, were estimated at 90,000 tonnes in August, close to the 89,000 tonnes exported in July, when shipments fell for the fourth straight month, government data showed.
Robusta is a bitter-tasting variety of bean mostly used in instant coffee brands to cut costs. Vietnamese robusta grade 2, 5 percent black and broken beans were offered by sellers at a discount of $20 to $30 a tonne to London's November contract. Buyers were bidding at discounts ranging between $50 and $60 a tonne, according to traders. That gave a range of indicative prices for the market, from a low of $1,937 a tonne offered by some of the buyers to a high of $1,977 a tonne wanted by some sellers.