| Some 15,000 lots Vietnam coffee fixed for delivery |
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SINGAPORE, March 13 (Reuters) - At least 15,000 lots of Vietnamese coffee beans are being fixed for delivery this month, trade sources said on Friday, in a move that could weigh on London futures recently hit by origin selling.
Exporters normally agree to settle prices after the delivery of beans to buyers. Dealers declined to reveal the agreed prices, but Vietnam's robusta grade 2, 5 percent broken was offered at discount of $100 under London's May contract. <0#LRC:>. One lot consists of 10 tonnes. "I guess 15,000 lots is a big amount, although two weeks ago I heard the amount was as high as 20,000 lots. Dealers in Vietnam have to fix the price now, otherwise they have to cover margin calls," said an exporter in Indonesia. "While the origins are being fixed, I am sure the market will fall. This is bearish for the market." London's May contract <LRCc2> powered to a six-week high at $1,739 a tonne on Thursday in technical buying after slumping to a contract low of $1,425 on Tuesday on origin selling and fears of falling demand for soft commodities during the global economic meltdown. "Some trade houses also allow suppliers to fix upon signing the contract, as you long as you don't mind the fear of defaults," said a dealer at a trading house in Vietnam. "The delivery is for March and the amount is quite big," he said. Vietnam is the world's largest producer of robusta, which is either blended with arabica beans for a lower-cost brewed coffee or processed into instant coffee. Vietnam has revised its preliminary forecast of its next 2009/2010 coffee crop, saying output could rise 4.2 percent to around 1 million tonnes or 16.67 million bags, the Vietnam Coffee Association said. [ID:nHAN490426] (Reporting by Lewa Pardomuan; Editing by Clarence Fernandez) |