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Vietnam Coffee Farmers May Sell Less Than 40% of Crop Before Tet

Coffee farmers in Vietnam, the world’s largest producer of the robusta variety, may sell less than 40 percent of the 2012-13 crop started Oct. 1 before Tet, according to Amsterdam-based Nedcoffee BV.

Growers have historically sold at least 50 percent of their harvest before the festival that marks the Lunar New Year in February, the trader said in a monthly report e-mailed today. This trend was broken last season because well-capitalized farmers were able to hold back stockpiles, according to Nedcoffee, which has offices in Ho Chi Minh City, Vietnam.

Vietnamese coffee was at 37,400 dong ($1.79) a kilogram (2.2 pounds) today, Daklak Trade & Tourism Center data on Bloomberg showed. Farmers in the Southeast Asian nation will probably only sell when prices reach 40,000 dong per kilogram, Nedcoffee said.

“Anything below that is considered too low by the farmer and they only sell the strict minimum to cover immediate expenses,” the trader said in the report. “Farmers are in no rush to flush their stocks to the market.”

Coffee growers in Vietnam are close to completing the harvest and sales stand at about 15 percent. Production there will fall to 25 million bags of 60 kilograms in 2012-13 from a record 26 million bags in 2011-12, the U.S. Department of Agriculture estimates on its website.

“The weather has so far been perfect for the ongoing harvest,” Nedcoffee said. “Good sunshine has helped coffee drying tremendously and we observe a better general quality than last year. However, the bean size is slightly smaller.”

Indonesia’s Harvest

Coffee harvesting in southern Sumatra, Indonesia’s main growing region, is 99 percent complete, Nedcoffee said. Farmers in the world’s third-biggest robusta grower have sold 80 percent of the crop picked, according to the trader, which has a factory there with a storage capacity of 300,000 bags.

Indonesia will produce 9.7 million bags of coffee in the 2012-13 season that started there in April, according to the USDA. Robusta output in southern Sumatra may fall by about 1 percent next season, Nedcoffee said, without providing a figure.

Robusta coffee for March delivery retreated 1.7 percent to $1,840 a metric ton by 5:29 p.m. on NYSE Liffe in London.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net

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