By Isis Almeida Dec 16, 2013 7:11 PM GMT+0800
Coffee beans from Vietnam, the world’s biggest grower of the robusta variety, are trading at a smaller premium as farmer sales are “picking up” and buyers are reluctant to pay as much, according to Volcafe Ltd.
Vietnamese beans for shipment in January and February were at a premium of $30 a metric ton to the futures on NYSE Liffe last week, the unit of commodities trader ED&F Man Holdings Ltd., said in a report e-mailed on Dec. 13. That compares with $50 a ton a week earlier. The beans used to make instant coffee and espresso gained for five consecutive weeks, the longest weekly advance since March 2011, as stockpiles tumbled.
“Differentials are easing versus the nearby months on Liffe as buyers are reluctant to pay the premium,” the Winterthur, Switzerland-based trader said, referring to the amount paid for physical coffee in relation to the price in the futures market. “Vietnamese farmer selling is picking up.”
Robusta coffee futures fell 8 percent this year partly as traders anticipated a record crop in Vietnam. The Southeast Asian nation will produce a record 30 million bags in the 2013-14 season started Oct. 1, Volcafe estimates. Prices rebounded last month as stockpiles in warehouses tracked by the exchange tumbled and shipments from Vietnam slowed.
Inventories of the variety fell 32 percent to 31,420 tons in the two weeks to Dec. 9, exchange data showed. That was the lowest level since at least 2002. Shipments from Vietnam declined to 61,155 tons and 80,000 tons in October and November, according to the General Statistics Office. That’s down from 102,000 tons and 122,000 tons a year earlier.
“Farmers sold around 10 percent to 12 percent so far,” Volcafe said, commenting on this season’s crop. “With six weeks to go before Tet, we should see some good volume hit the market during this time,” the trader said, referring to the festival that marks the Lunar New Year. Farmers usually boost sales before Tet.
In Indonesia, the third-biggest robusta grower, bean deliveries from farms accelerated to about 1,700 tons last week, Volcafe said. That compares with 1,500 tons a week earlier, data from the trader showed.
Indonesian coffee for shipment in January and February was at a premium of $190 a ton to the London futures last week, unchanged from a week earlier, according to the report.
“Local suppliers are reluctant to sell and prefer to keep the goods and monitor the market development,” the trader said. “Due to expensive differentials and end of season, almost no activity seen in the export market.”
A bag of coffee weighs 60 kilograms (132 pounds).