One exporter said the latest crop may have produced 800,000-850,000 tonnes, or 13.3 million-14.2 million 60-kg bags, lower than a Vietnam Coffee and Cocoa Association forecast of 16.7 million bags.
Still, some buyers cautioned that the association often revises its output forecasts in April and early forecasts are often regarded as an attempt to shore up prices. "After all harvesting ended, the crop appeared to be smaller than previously thought," a Vietnamese exporter in the key growing province of Daklak said.
"Having seen limited output, and given low prices now, farmers are not selling much, so we cannot buy on domestic markets." An International Coffee Organisation report last week put Vietnam's 2009/2010 crop at 18 million bags, down from 18.5 million bags in the previous crop. Another trader at a foreign company said sales were slow because prices were not attractive to farmers.
A kg of robusta beans stood at 24,100-24,200 dong ($1.3) on Tuesday, slightly off the 24,200-24,400 dong quoted last week and down around 5 percent from the same time last year. Discounts to London March contract stood at $40-$45 a tonne, widening from $25-$30 last week, meaning Vietnamese robusta grade 2, 5 percent black and broken now stood at $1,330-$1,335 a tonne, free-on-board basis.
"Buyers are not willing to go long with Vietnamese coffee now because many of them have not received cargoes under previous contracts," the Daklak-based exporter said. "They now have to chase the old shipments." Last week traders said coffee sales from Vietnam were slowing, underscoring fears that more delays or defaults could emerge after at least one firm defaulted on shipments of between 5,000 tonnes and 20,000 tonnes.
A more distant worry, traders said, are unusual rains in Daklak and nearby provinces this week in the Central Highlands coffee that came as flowers emerged after farmers watered trees early in the production cycle for the next harvest due in October. Watering usually starts in February.
But, the unusual rains have not dented all optimism on next years crop despite a state forecaster saying there could be a drought from March in an article in Tuesday's Nong Nghiep Vietnam newspaper, which is run by the Agriculture Ministry. "The general understanding is that Vietnam will have a bumper crop next year, after this crop has lower output, so rain could ruin some flowers but the overall output will be higher than this year," the Daklak exporter said.