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Coffee supply up from Vietnam, Indonesia; but prices resilient
Vietnam raised coffee export forecasts for 2011 by 4 percent and exports from Indonesia nearly doubled last month, but the increase may have little impact on global prices that are underpinned by concerns about scarce good-quality beans.
A rally in New York arabica futures to 34-year peaks pushed up London robustas to a new contract high at $2,624 a ton this week, and high coffee prices have also forced retailers to pass on the cost to consumers.
Vietnam, the world's top robusta producer, raised its export forecast for calendar 2011 to 1.3 million tons, or 21.67 million bags, from 1.25 million tons forecast last month, the Agriculture Ministry said, citing rising export volume so far this year.
"The rise from Vietnam may fit in a global coffee deficit expected this year," a trader at a foreign company in Ho Chi Minh City said, reacting to the Agriculture Ministry`s forecast.
"Stocks in Vietnam are running out and overall, the supply-demand of physical coffee will not influence much on futures prices," he said.
Vietnam`s coffee exports this year would rise more than 11 percent from 19.5 million 60-kg bags shipped in 2010, based on government data. Robusta is mainly used in instant coffee.
The global coffee balance is projected to be in deficit in 2011/12 with a crop of around 131 million 60-kg bags and consumption of 135 million, coffee information firm CoffeeNetwork said in early February.
It forecast Vietnam`s 2011/2012 crop to rise 10 percent to 22 million bags.
In second-largest robusta producer Indonesia, exports from the main growing island of Sumatra nearly doubled in April versus the same month a year ago to 23,247.05 tons, trade data showed on Thursday.
High prices a motivation
Dealers said the coffee were taken out, to take advantage of high prices, from stockpiles held by merchants and farmers in warehouses, which are likely to fall in coming months with output affected by bad weather and demand from local roasters showing no signs of slowing down.
Indonesian coffee bean production this year will fall by 30 percent from an estimated 600,000 tons in 2010, as rains in key producing areas damage cherries, said the Indonesian Coffee Exporters Association (AEKI).
"Monthly exports were high because of stocks from last year`s harvest and some stocks from Tripanca. Some exporters also sold cargoes from the new crop but the volumes were not much," said a dealer in Bandar Lampung, the provincial capital of Lampung.
"The market is currently buoyant and may boost exporters` appetite to sell more but most of them are cautious because they worry they may not be able to meet the contract due to expected lower production."
Trading firm PT Tripanca failed to settle a dispute over payment with banks in 2008, leading to the seizure and auction of around 60,000 tons of beans.
"Coffee exports this year increased because of good prices and higher demand compared to last year," said Muchtar Lutfie, the research head of the Indonesia Coffee Exporters Association (AEKI) for Lampung branch.
In Vietnam, coffee exports this year would bring in $2.97 billion, up from $2.63 billion forecast in early April, the Agriculture Ministry said in an undated report, seen by Reuters on Thursday.
It said it raised the annual forecast because January-April coffee shipments have risen 1.5 times from the same period last year to 674,000 tons and its revenues have doubled.
The ministry`s forecasts are based on the calendar year ending December, while Vietnam`s coffee crop year lasts between October and September.
For the October-December 2011 period - the first three months of Vietnam`s next 2011/2012 crop - coffee exports would total around 303,000 tons, the Agriculture Ministry said.
As such, the export volume would be a rise of 4.5 percent from the same period last year, based on GSO data.
Vietnamese robusta eased to 49.3-49.5 million dong ($2,393-$2,403) a ton in the top growing province of Daklak on Thursday, from an all-time high of 50 million dong on Wednesday.
Several farmers said they may hold back sales and start selling if prices rebound to 55 million dong a ton.
tuoitrenews,reuters
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