Vietnam Coffee-Prices Fall on Strong Sales

Domestic coffee prices in Vietnam fell about 2 percent in the past week after growers sought to sell more beans to take advantage of higher export prices, traders said on Tuesday.

Trading houses in Buon Ma Thuot, the capital of Daklak province, offered to buy robusta beans at 25,000 dong per kg ($1.4) on Tuesday, down from a range of 25,500 dong-25,700 dong per kg last week but up more than 5 percent from two weeks ago.

Domestic prices quoted by the Vietnam Coffee Cocoa and Association stood about 200 dong higher than those offered by trading houses at 25,200 dong per kg, down from more than 26,000 dong per kg last week. Data from the association showed indicative export prices for spot shipment this week also dropped to $1,390-$1,400 a tonne, on a free-on-board basis, about $20-$30 less than last week when it was quoted at $1,420 per tonne, but still $100 higher than the level two weeks ago.

« Even though prices are down from last week’s peak they are still very profitable for growers, so they are still cashing in on the high prices, » said a trader in Buon Ma Thuot who declined to be identified. Traders have put the cash cost of production at around 18,000-19,000 dong per kg this year thanks to lower fuel prices.

Traders also said supply was expected to run out quickly. The next harvest is due to start in late October and export firms could start selling the fresh beans from late August or September when they can assess output better. Last week, the government estimated Vietnam’s July coffee exports — the second-largest agro-product export item in terms of value — rose 7.7 percent from the same month last year to an estimated 70,000 tonnes, or 1.17 million bags.

Traders said Vietnam may still have around 2.8 million bags left unsold, after deducting shipments so far this crop year and 1 million bags used for domestic consumption.

Source : Flexnews