Daklak Investment Export - Import Joint Stock Corporation - Vietnam Coffee-Trading slows, July exports to fall vs June

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Vietnam Coffee-Trading slows, July exports to fall vs June

    * Exporters selling beans bought for stockpiling -traders
   * July shipments may dip to 80,000 tonnes

   By Ho Binh Minh
   HANOI, July 13 (Reuters) - Physical coffee trading slowed in Vietnam this week as exporters had already unloaded a major part of remaining stocks since late June, taking advantage of high international prices, traders said on Tuesday.

Exporters in Vietnam, the world's second largest coffee producer after Brazil, sold in late June and early July as London's September robusta contract rallied to a 20-month peak of $1,795 per tonne on July 2.
   "They've sold a good amount of coffee to catch good prices, partly from the volume they bought for stockpile," a trader with a foreign firm in Ho Chi Minh City said, referring to a government-backed plan to retain 200,000 tonnes until Oct. 15.
   Exporters started buying for stockpiles on April 15 and will stop on Thursday, but traders and industry officials said the plan to stockpile coffee was not a complete success.
   "The purchase plan ... did not achieve its goal because businesses faced difficulties in accessing loans," Nguyen Tri Ngoc, head of the Agriculture Ministry's Crops Department, was quoted by the official Vietnam News Agency last Thursday as saying.
   Traders attributed the rally in London robusta prices since late June to concerns over possible thin supplies from Vietnam, a drop in certified stocks and also from other market factors such as China's move on the yuan

   FALLS IN EXPORT VOLUME
   Vietnam's coffee exports last month dropped to an estimated 90,000 tonnes from 100,000 tonnes in May, government statistics show.
   Traders forecast July loading would shrink to 75,000-80,000 tonnes, despite a good flow in the first few days of the month.
   "Exporters started loading for deals signed in June during the price rally, so the volume in the first part of July may be high, but overall loading will be average," another trader said.
   Vietnam exported 53,300 tonnes of coffee in July 2009.
On Tuesday robusta beans were quoted at 28,900-29,200 dong per kg ($1.51-$1.53) in the key growing province of Daklak, against 29,200 dong on Monday and 29,300-29,400 a week ago, while traders said farmers aimed to sell at 29,500 dong ($1.55) per kg.
   The fall tracked a drop of $4 in the London September robusta contract to $1,705 a tonne on Monday, although support was seen from the limited volume of fresh supplies expected in the lead up to Vietnam's harvest.
   Exporters quoted robusta grade 2, 5 percent black and broken at discounts of $90-$110 a tonne to the September contract, while buyers bid at $100 to $140 a tonne, leaving trade thin. The free-on-board price ranged between $1,565 and $1,605 a tonne.
   "Vietnam is looking at a good crop, so exporters will not retain beans strongly, but will sell gradually between August and October to avoid a build-up in stocks when the harvest arrives," the first trader said.
   Harvesting of the 2010/2011 crop will start in late October in the Central Highlands coffee belt.
   Vietnam may not see a rise in coffee output in the 2010/11 season, according to the International Coffee Organization's (ICO) June report that puts production for the next crop year at 16 million to 18 million 60-kg bags.
   The previous 2009/2010 crop produced an estimated 18 million bags, or 1.08 million tonnes, a Reuters poll found on Jan. 29.
   A typhoon off the Philippines on Tuesday that could bring strong winds and heavy rains to rice-producing areas is forecast to approach China's Hainan island by Friday, skirting Vietnam's coast, state forecasters said.
   The typhoon is not expected to hit the Central Highlands coffee belt in Vietnam's south. ($1=19,090 dong) (Editing by Ed Lane)

Tuesday, 13 July 2010 15:15:48

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