Coffee growers in Vietnam withhold sales to try to boost prices

Coffee growers and traders from Vietnam, the world’s second-biggest producer, are withholding beans from sale in a bid to push up prices, with warehouses storing up to half the nation’s crop.

Stockpiles may total as much as 450,000 tons, or 50 percent of output, Le Van Son, head of Intimex Binh Duong Co., a unit of Vietnam Intimex Joint-Stock Corp., said by phone. That compares with about 10 percent to 20 percent of the crop at this time last year, Son said in an interview Wednesday. Intimex was the country’s second-biggest shipper of the previous crop.

Reduced sales of Vietnamese robusta, the bitter-tasting variety, may help to halt a 14 percent decline in prices over the past year. Higher prices may increase the Asian nation’s export earnings and boost farmers’ incomes.

“Like many other exporters we don’t want to sell now, it’s better to wait and see how global prices will be later,” said Hua Thanh Hong, business manager at Sept. 2nd Import-Export Co. “International companies are buying Vietnamese coffee at about $1,250 a ton at Ho Chi Minh City port Wednesday, that is pretty low, compared with about $1,500 a ton at the same time last year.”

Robusta futures in London dropped $15 to $1,279 a ton on the Liffe exchange yesterday. In Dak Lak, Vietnam’s largest growing area, coffee traded at VND23,200 ($1.22) a kilogram Wednesday compared with about VND25,000 last year, according to figures from the provincial government Web site.

“The volume of unsold coffee remains relatively large,” said Son at Intimex Binh Duong. “Up to 50 percent of the crop’s output is still at warehouses of farmers and middlemen as they are holding back the beans because of low prices.”

The smaller supplies from growers have caused exporters to delay sales, according to executives and managers at the country’s four biggest shippers, Vietnam National Coffee Corp, known as Vinacafe, Intimex, Thai Hoa Production and Trading Corp. and Sept. 2nd Import-Export.

Vietnam’s coffee shipments totaled 241,000 tons in the first two months of this year, 21 percent less than the same period in 2009, according to figures from the Hanoi-based General Statistics Office. The February figure was preliminary. (Bloomberg)

Tags: Vietnam agriculture, Vietnam Coffee, Vietnam coffee growers