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Vietnam coffee sales to pick up on high prices; discounts widen
[HANOI] A jump in Vietnamese coffee prices to three-year highs is boosting sales, but recent rains in the Central Highlands could delay next month's harvest and see some farmers miss out on the current price rally, traders said on Tuesday.
Rising sales by Vietnam, the world's biggest robusta producer, since the Oct 1 start of the 2016/17 season could help ease concern over a global coffee deficit and trim recent price gains.
"Selling is faster this year on higher prices," a trader at a foreign firm in Ho Chi Minh City said.
Traders estimated up to 200,000 tonnes (3.33 million 60-kg bags) of 2016/17 crop beans have been sold, including domestic market sales and exports.
"The selling pace is unusually fast, which did not happen last year," said a trader in Buon Ma Thuot, the capital of Daklak, Vietnam's largest growing province.
Traders have forecast October's coffee exports at 70,000-100,000 tonnes, down from 129,000 tonnes last month, due to lower stocks before the harvest.
Robusta prices on Vietnam's domestic market jumped nearly 3 per cent in the past week to 44.3 million to 44.7 million dong (S$2,765-S$2,790) a tonne on Tuesday, their highest since the week ended March 30, 2013, traders said.
Expectations of a deficit in coffee supplies were underpinning both arabica and robusta prices. The ICE January robusta contract settled up 0.4 per cent on Monday after hitting US$2,163 per tonne, a contract high and two-year peak for the second-month.
But recent rain in Vietnam's coffee belt is seen delaying cherry ripening and slowing the harvest, meaning growers could miss out on the high prices, said General Direct Le Tien Hung of Simexco, a leading exporter based in Daklak.
"We are concerned that the harvest this year may face delays because of rain," Mr Hung told Reuters.
The weather remained cloudy on Tuesday in the provinces of Daklak and Lam Dong, with rains in some areas in Daklak, residents said.
The rainy season is forecast to end in early November, coinciding with the start of the Daklak harvest, a provincial meteorologist has said.
Exporters were seeking to sell Vietnamese robusta grade 2, 5 per cent black and broken beans at discounts of US$40 a tonne to ICE January robusta contract, while bids were at discounts of US$50-US$70 a tonne.
Last Tuesday discounts stood at US$50-US$60/tonne.
"Exporters are not willing to sell much now as they don't have much coffee handy," said Mr Hung of Simexco.