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Issue #584 | Breakbulk Quarterly

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2014 Media Kit
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Vietnam’s coffee exports may face delays

By: | at 08:00 PM | Channel(s): International Trade  

Vietnamese exporters may have to delay coffee loading in the coming months, as supply of beans in the domestic market has been hurt with farmers holding back sales due to a stockpiling plan and falling prices, a senior industry official said.

The delays in coffee shipment from the world’s second-largest exporter after Brazil could lend some support for London robusta futures market where the price of beans used for making instant coffee has been falling this week due to a strengthening dollar.

“Exporters are facing tough conditions in loading for foreign buyers and they may not deliver on time next month,” Do Ha Nam, chairman of a club of Vietnam’s 20 largest coffee export companies, told Reuters.

It was not clear how much Vietnam has committed to deliver in May, Nam said, but added that the overall shipment volume will fall following a rise in April shipment.

Vietnam’s coffee exports this month rose 4.8 percent from a year ago to an estimated 130,000 tons, or 2.17 million bags, the government said.

Nam said exporters were seeking to buy at least 10,000 tons from either foreign trading houses which have stocks in Vietnam or look elsewhere, including Indonesia, Vietnam’s robusta rival producer.

He said exporters have started buying under a government-backed plan to stockpile 200,000 tons of coffee for six months that ends on Oct. 15, but even with a buying price of 24,500 dong ($1.29) per kg the purchase has not been smooth.

“They started buying but it’s been very difficult to buy now,” said Nam said, who is also the chief executive of Intimex, one of Vietnam’s largest coffee exporters and which is among the companies to implement the stockpiling scheme.

Vietnam’s coffee trade has been slow in the past week due to thin stock, traders said.

Vietnamese firms have already delayed or defaulted on delivery of 200,000 tons of beans under the current October 2009-September 2010 crop, after exporters and buying agents placed ill-fated bets on a rise in futures prices. (Reuters)