* Coffee prices may rise in May -traders
   * Current stocks of up to 6.7 mln bags
   
   By Ho Binh Minh
   HANOI, May 4 (Reuters) - Vietnamese coffee prices are expected to rise this month as exporters have started buying under a government-backed stockpiling plan, traders said on Tuesday.

London robusta futures recovered last week, with July <LRCc2> closing up $13 at $1,335 a tonne on Friday , up nearly 4 percent from a one-month low of $1,284 a tonne on April 27 before news of possible delays to Vietnames exports hit the market.
   Last Wednesday the chairman of a club of Vietnam's 20 largest coffee export companies said exporters may have to delay loading in coming months due to the stockpiling plan and falling prices.  However, traders said exports in May from the country, the world's second-largest producer after Brazil, would not face serious delays and noted that trading overall had been slow in recent months.
   Domestic prices in Vietnam's main growing province of Daklak rose to 24,000-24,200 dong ($1.27-$1.28) per kg on Tuesday, tracking London gains, from 23,000-23,500 dong early last week.
   "Prices are going to go up this month because farmers who still have stocks are aiming to sell at 25,000-26,000 dong per kg or above," a trader in Ho Chi Minh City said.
   
   SLOW STOCKPILING 
   Traders said exporters were offering to buy robusta beans at 25,000 dong per kg, but buying was slow.
   A government-backed plan envisages exporters buying 200,000 tonnes over a three-month period ending July 15 and holding the stock through Oct. 15 to shore up prices. [ID:nHAN458980]
   "The stockpiling plan has created another buying force in the market, which has calmed farmers and slowed their sales," another trader in Ho Chi Minh City said.
   The first trader said: "For coffee farmers, their demand for cash slows after March, so they do not have to rush to sell."
   Vietnamese coffee growers often need money to buy fuel and hire extra labour to water trees in February and March for the next production cycle after their harvest ends in January.
   The watering process ends with the arrival of the rainy season, usually in the second half of May.
   With rival robusta producer Indonesia coming in with fresh beans at the start of its harvest, buyers are not rushing to take Vietnamese beans, traders said.
   They estimated the current stock at 350,000-400,000 tonnes, or 5.8 million to 6.7 million 60-kg bags, taking into account the volume exported and domestic consumption , well above the 4 million bags estimated on May 5, 2009. Robusta grade 2, 5 percent black and broken beans were offered for reference in a wide range, from a discount of $10-$30 to London's July contract of $1,335 a tonne, to a level on par with London to a premium of $15-$25 a tonne.
   Last week the beans were offered at $1,300-$1,330 a tonne. 
    
  
Tuesday, 04 May 2010