Vietnam, the world’s second-largest Robusta coffee producer, predicts that its coffee exports could drop further than the previously 22 per cent forecast if prices extend their downward trend.
Coffee shipments could be less than 650,000 tons, the lowest level forecast by the Vietnam Coffee and Cocoa Association earlier, said the chairman of Vicofa Van Thanh Huy. “The level, however, will not be reached if farmers retain their beans waiting for higher prices.”
Prices in Vietnam have eased to US$1,080-US$1,120 a ton last week, the lowest since a range of US$1,070-US$1,090 in late December.
Last November, when the harvest was under way, Huy estimated Vietnam's export at 650,000-700,000 tons this crop year, or 16 to 22 per cent below the 834,000 tons it sold in the October 2004-September 2005 season.
Harvesting ended in January and the coffee association, the country's industry body, kept its output figures unchanged - widely regarded by traders as underestimates - of 600,000 to 630,000 tons, compared with 804,000 tons (13.4 million 60-kilo bags) in the previous crop year.
The drought in early 2005 had hit coffee production in the Central Highlands, which turns out 80 per cent of Vietnam's total.
"The harvest showed an output fell between 30-40 per cent depending on the growing areas," Huy said.
He said the stocks carried over from the previous crop were estimated at between 120,000 and 150,000 tons, but foreign traders projected a lower range of 120,000 to 130,000 tons.
"It is in fact difficult to get stock figures this year as key warehouses are almost empty," said a trader at a foreign firm in Ho Chi Minh City.
Coffee is the world's second-most traded commodity after crude oil. The coffee crop year lasts between October and September in Vietnam, which exports mostly Robusta beans used widely in making instant coffee.
Prices of Robusta coffee are dropping by VND2,000 to around VND14,800-16,000 per kilo in the central highlands Dak Lak province, the largest coffee growing area in Vietnam that produces one-third of the country's coffee output.
Huy said the association has advised members, which are also Vietnam's key coffee exporters, to sell under outright contracts as the gap between London prices and the Vietnamese export quotations has been narrowing.
"London prices are fluctuating a lot so we told exporters to avoid selling at a discount," Huy said.
The differentials narrowed to US$20-US$30 a ton this month from around US$100 in October at the start of the crop year.
Traders said it was difficult to assess Vietnam's coffee stocks, but foreign buyers have revised downwards estimates of the country's crop to between 700,000 and 750,000 tons, from more than 800,000 tons in their previous estimates.
"The export is actually falling and more beans are being retained in Vietnam," said a trader in Ho Chi Minh City.
According to the chairman, Vietnam gained USUS$165 million from selling 151,000 tons of coffee abroad in the first two months of this year, up 1.8 per cent in value and down 37.3 per cent in volume against the same period last year.
T.C
Vietnamese
