Vietnam local coffee price highest since march 2008

Robusta bean prices on Vietnam’s domestic market rose around 2 percent from the previous day to 38.2 million dong ($1,959) a ton on Wednesday, the highest since March 2008, and trading has slowed, traders said.

Slowing sales from Vietnam, the world’s largest producer and exporter of robusta coffee, could provide further support to London robusta futures prices, which rose on Monday and Tuesday on concerns about the outlook for the 2011 crop in key producer Colombia.

“Farmers are not selling and exporters who have sold (to foreign buyers) earlier now find it difficult to buy locally,” a trader in Ho Chi Minh City said. Vietnamese exporters have sold up to half of the 2010/2011 coffee harvest, between 400,000 and 600,000 tons, or 6.67 million to 10 million bags, but sales have been slow due in part to higher prices, traders said on Tuesday.

Coffee prices in Vietnam, which closely track London, previously hit 39.2 million dong per ton on March 14, 2008 in Daklak, the largest growing province in the Central Highlands coffee belt.

Traders said exporters, faced by tighter credit policy as banks follow the central bank’s guidance to slow lending this year to control inflation, have stopped dealing for shipments in January as they already have loading commitments to meet.

“There are only few days for transactions in February and exporters also do not want to deal with March yet as they fear price risks,” the Ho Chi Minh City-based trader said. Vietnam will enter an extended public holiday from late this month to mark the Lunar New Year that begins on February 3. Employees in the state sector will take off on January 31 and return on February 7, and many private companies are expected to follow suit. – Reuters

Tags: Vietnam Coffee, Vietnam coffee prices