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  • Nov 9th, 2005
  • Comments Off on Vietnam coffee prices up on supply crunch
Coffee prices strengthened in the past week in Vietnam, the world's second-largest producer after Brazil, as supplies of old bean declined and farmers held back fresh beans from the new harvest, traders said.

A kilogram of robusta beans rose to 14,250 dong (89 US cents) on Tuesday in Daklak from 14,050 dong on Monday and 13,350 dong a week ago.

Meanwhile, exporters offered the robusta grade-two, 5 percent black and broken at $880-$890 per tonne, free-on-board Saigon Port, unchanged from last week.

Traders said farmers in the Central Highlands coffee belt would accelerate harvesting from late this month. The region churns out around 80 percent of Vietnam's coffee annually.

"Old bean stocks are emptying and the focus now is on the new beans," said a trader in Buon Ma Thuot, the capital of key coffee-growing Daklak province.

He said farmers in Daklak had started sporadic harvesting of the new crop and some already have new beans with exportable quality, but few were willing to sell because they expected prices to rise on a projected output decline this year.

Another trader in Buon Ma Thuot cited his suppliers, who had begun harvesting, as saying yields from their plantations would be around 20 to 30 percent lower than the previous crop due to a drought.

The Vietnam Coffee and Cocoa Association has said the harvest, which started last month, would produce 10.0-10.5 million 60-kg bags from 12.5 million bags in the previous harvest that ended in January.

Vietnam's coffee-crop year runs from October to September, starting with a four-month harvest.

Copyright Reuters, 2005


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