Vietnam coffee-delays may emerge as stocks run out

Up to a third of Vietnam’s coffee shipments expected for this month could face delays because domestic stocks have run out after sales picked up on good prices in July, traders said on Tuesday.

Up to a third of Vietnam’s coffee shipments expected for this month could face delays because domestic stocks have run out after sales picked up on good prices in July, traders said on Tuesday.

Exporters might delay loading 10,000-20,000 tonnes of the 60,000-75,000 tonnes expected to be shipped this month, traders said, after August loading surged 57.4 percent from a year ago to 85,000 tonnes.

“There are no beans left to buy even if we offer very high prices because farmers sold when prices were good in June and July,” an exporter in the top coffee growing province of Daklak said.

His company has sought but failed so far to buy robusta beans at 29,800 dong ($1.53) per kg, above the market level of 28,300-28,400 dong.

Last month an industry official told Reuters that coffee businesses had run out of stock for contracts with shipment between September and November.

Given the scant supply, most exporters have stopped offering quotes for spot shipment.

Indicative offers placed Vietnamese robusta grade 2.5% black and broken at a discount of $80 a tonne to the London November contract, at the higher end of last week’s discounts of $77-$80 a tonne.

Indicative prices for fresh 2010/2011 beans stood at discounts of $100-$110 a ton to the January contract, against $100 a ton quoted in late August, but no trading took place as exporters were reluctant to sign new deals now.

A trader at a foreign company said trading houses short of robusta beans may have to buy from other foreign companies which have built up stocks in their Vietnam-based warehouses at discounts of $70-$80 a ton, but the supply was limited.

Coffee prices in Vietnam have risen nearly a fifth from the end of last year, but were still below a level of 30,800 dong per kg reached in early August, the highest since September 2008.

Harvesting of the next crop could start in late November as the rainy season is expected to end a month later than usual, traders and an industry official said.

“Output may be 3-5 percent higher than this year, but it all depends on the rains just before the harvest,” the Daklak-based trader said.

The Vietnam Coffee and Cocoa Association said last month the next crop could be similar to this harvest of 16.7 million tons.

Tags: Vietnam Coffee, vietnam coffee exports