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Vietnam coffee exporters delay 80,000 tons in shipments
Exporters in Vietnam, the world’s largest robusta producer, have delayed the shipment of at least 80,000 tons of beans after recent falls in London futures prompted farmers to hold back stocks, dealers said Thursday.
As fears of defaults from Vietnam intensified, some roasters and trading houses chased robustas from neighboring Indonesia, where beans were on par with London levels even though the harvests were near their peak, they said.
The robusta variety is used for making instant coffee and espresso.
London’s September contract has recovered from a bout of selling blamed on worries of a global surplus but the second-month contract is still within sight of a record low of US$1,250 a ton struck in late June.
“I heard some contracts have been delayed since March. It’s difficult to say how much because everyone keeps quiet,” said a dealer at an international commodity trading house in Vietnam.
“But I would say a total of 80,000 to 100,000 tons have been delayed ... on the way to being defaulted on.”
Dealers said farmers insisted on selling the beans at prices matching
London levels but exporters were only willing to take robustas at a discount, citing ample supply, even though the harvests had already ended a few months ago.
Vietnam collected 18.3 million 60-kg bags in the previous crop that ended in January. The next harvest is due to start in late October.
“Some farmers think if they hold stocks then the price will go up. But that’s not going to be the case because people can find other origins to cover their shorts,” said a dealer in Singapore.
“From my discussions with other dealers, around 200,000 tons of beans are still unsold in Vietnam. It’s either unsold or undelivered,” said the dealer, adding that some exporters delayed their shipments and waited for the next crop instead. September robustas rose $23 to settle at $1,410 per ton but the contract was well below a peak around $2,390 a ton last July.
“The price was high last year and farmers haven’t adapted to the new levels. This is why we are facing this problem, because they think they can’t sell beans at discount to London,” said the dealer in Singapore.
The Vietnam Coffee and Cocoa Association has asked exporters to halt sales of coffee from Vietnam’s next 2009/2010 crop in a bid to boost prices.
In Indonesia’s main growing island of Sumatra, Grade 4, 80 Defects were on par with futures prices, the smallest discount since last October, due to short covering and a lack of offers from farmers, who hope for a greater rebound in London.
Indonesia is the world’s second-largest robusta producer.
“We’ve heard about delays and defaults in Vietnam and if this continues until October, all buyers will turn to Indonesia. We are starting to see this happening,” said a dealer at an international trading house in Bandar Lampung, the provincial capital of Lampung.
“The beans are expensive here even though the harvests are at their peak. They hold back stocks because they have extra money from selling other crops such as cocoa. Beans are already quoted at London levels,” he said.
The crop in Sumatra starts in April and normally peaks in July or August.
Indonesia has estimated coffee output will grow 3 percent to 689,000 tons this year, with robusta accounting for about 80 percent.
thanhnien, reuters
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