Coffee producers in Vietnam limited sales due to the record harvest

Coffee farmers in Vietnam, the world's largest producer of Robusta coffee, are limiting the sales of the record before the harvest festival of Tet Lunar New Year, as they expect prices to rise.
Producers sell 33% of its beans before the holiday start on 28 January, compared with an average of 43% over the past five years, according to the average of 12 traders and analysts estimates compiled by Bloomberg. The producers sold 25% of their harvest of 1.7 million tonnes so far this year, compared with 33% the previous year, the survey showed. Producers usually accelerate sales to increase earnings before the holiday.
Robusta futures traded in London went into high last month, recovering from the low of the last three years due to the slow pace of sales in Vietnam and the decline in stocks that were considered by NYSE Liffe as minors since 2002. In contrast, stocks on farms in Vietnam probably climbed to a record, said the country's largest private seller, Anh Minh Co.
"Thanks to good coffee prices in recent years and access to cheap financing, producers have no pressure to sell and can wait for the market to reach their target levels," said the business manager of Tong Teik Pte, a company owned by RCMA Commodities Asia Pte, Alexander Gruber, referring to domestic prices increased in three of the last four years.
The beans in Dak Lak province, which supplies about 30% of the crop of the country, were sold at 34,800 dong ($1.63) per kilo this week, according to data from Trade & Tourism Center. Although prices have increased by 18% compared to the lowest in three years in November they fell 24% compared to 45,500 dong (U.S.$ 2.14) reached in March, which was the highest level in nearly 18 months.
"Prices are not good and are worse than in the period before the Tet last year, so I 'm not selling much," said Huynh Van Phuoc producer, who has four hectares in Dak La . " I'll wait until after the holiday for prices to improve."
The increase in stocks on farms in Vietnam is likely to limit the price increase after Tet, said the deputy director of Minh Anh, Phan Anh Hung. "Not to be sold among producers in Vietnam quantity of about 1.2 million tons to 1.3 million tons is probably now at a record level for this time of year. After Tet, the producers would sell more if prices rise and it is clear that this flow of supply will push prices down. "
Stocks in Vietnam will reach 3.82 million bags of 60 pounds at the end of the year, which began on 1 October, compared to 1.97 million bags in 2012/13, stressed the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA) in a December 13 report. The country will ship 24.5 million bags a record 28.5 million bags harvest, according to the report.
Robusta increased by 24% to close at $ 1,799 a tonne on 13 December, with respect to the lowest value in 29 months, U.S.$ 1,447 on November 14. Futures increased by 2.1% to U.S.$ 1,718 this year, after falling 13% in 2013.
Vietnam exported 1.29 million tons last year, 26% less than in 2012, estimated the General Statistics Office in the country. Monitored by NYSE Liffe stocks were 28,200 tonnes on January 6, according to trade data.
Source: CaféPoint