Coffee farmers in Vietnam, the world’s largest producer of the robusta variety used to make instant drinks, sold 55 percent of their 2013-14 crop as local and futures prices rose, according to Volcafe Ltd.
Vietnamese coffee prices gained 18 percent in the local market this year as futures advanced and growers initially held back supplies, slowing exports, data from the Daklak Trade & Tourism Center on Bloomberg showed. Farmers in the Southeast Asian nation had sold 35 percent to 40 percent of the crop by Feb. 21, down from 53 percent a year earlier, Volcafe, a unit of ED&F Man Holdings Ltd., said in a report e-mailed that day.
Trading saw “another active week in Vietnam, with strong physical supplies of farmers and agents selling large volumes at rising local prices,” Winterthur, Switzerland-based Volcafe said in a report e-mailed on March 7. “Good volumes of the consignment stocks with exporters were fixed.”
Robusta coffee futures traded on NYSE Liffe in London gained 26 percent this year, with prices boosted by an 81 percent advance in arabica beans, the kind favored by Starbucks Corp. Vietnamese farmers have also been holding back supplies at a time stockpiles in warehouses monitored by the exchange are at their lowest level since at least 2002.
In the export market, Vietnamese beans for shipment in April and May were trading at a discount of $50 a metric ton to the exchange price, according to Volcafe. That’s unchanged from a week earlier, data from the trader showed.
“Export demand remains brisk for nearby as well as forward spreads,” Volcafe said. “Huge volume was exported in the last week of February,” it said, estimating shipments at 2.25 million bags in the month. A bag of coffee weighs 132 pounds.
In Indonesia, the world’s third-biggest robusta coffee grower, deliveries from farms slowed to 1,500 tons to 1,700 tons last week, data from the trader showed. That compares with 2,300 tons to 2,500 tons a week earlier.
“Parts of the fly crop and old crop are still in interior, with limited volume,” Volcafe said, referring to a crop that usually peaks in December or January and the last main crop. “The harvest is not expected before beginning of April from the lowland and in May/June from the highland.”
Indonesian beans for shipment in April and May were trading at a premium of $40 a ton to the exchange price, down from $55 a ton a week earlier, Volcafe data showed. Premiums and discounts in the physical market usually move in opposite directions to futures, which gained 2.7 percent last week.
“Worries about a lack of supply keeps exporters reluctant to offer,” Volcafe said. “We continue to hear estimates that the crop will be about 30 percent lower versus last crop.”
To contact the reporter on this story: Isis Almeida in London at email@example.com