Vietnam Begins Coffee Stockpiling

Vietnamese companies have begun buying coffee on the domestic market in a plan to stockpile 200,000 tonnes for nine months to shore up prices, an industry official said on Tuesday. The plan by the world’s second-largest exporter after Brazil is aimed at keeping off the market one fifth of Vietnam’s coffee output to boost prices, which on Tuesday revisited an eight-month low last seen in late February. [ID:nHAN501648]

“The prime minister has approved this plan and it is up to companies to decide their purchase details,” Chairman Luong Van Tu of the Vietnam Coffee and Cocoa Association told Reuters. “Some of the companies have started buying.”

Companies joining the stockpiling scheme are among the country’s 20 largest coffee export firms, Tu said, without giving any names or saying at what price companies should buy.

He said the companies were entitled to bank loans to smooth their purchases at a preferential interest rate, which would be 60-70 percent lower than the usual market rates.

Robusta beans fell on Tuesday to 22,500-22,700 dong ($1.18-$1.19) per kg, tracking falls in the London futures market where the May robusta contract lost $10 a tonne to close at $1,222 per tonne, after setting a contract low of $1,217. [ID:nLDE62729B]

The Vietnam Coffee and Cocoa Association, or Vicofa, is an industry body that oversees coffee production and export.

Source : Flexnews