"Vietnamese coffee growers 'hoard' goods waiting for high prices"

According to Bloomberg news agency, coffee growers in Vietnam, the world's largest producer of Robusta coffee, continue to "hoard" their goods waiting for higher prices despite a bumper crop before the Lunar New Year.

Coffee harvest. (Photo: Quang Quyet/VNA)

A survey of 12 coffee farmers in Vietnam conducted by Bloomberg News showed that they expect to sell only about 33% of their newly harvested coffee before the Lunar New Year holiday starting on January 28, lower than the average of 43% sold at the same time in the past five years.

Farmers have sold 25% of this year's 1.7 million tonnes of coffee harvest, compared with 33% in the same period last year.

Mr. Huynh Van Phuoc, a 46-year-old farmer who has 4 hectares of coffee in Dak Lak, said that the current price is lower than before Tet last year, so he did not sell much but kept it until after Tet to get a better price.

According to data from the Dak Lak Trade and Tourism Center, in this province, which contributes about 30% of the country's total coffee output, the price of coffee beans was traded at VND34,800/kg on January 15.

Coffee prices have risen 18 percent from a three-year low in November 2013, but are still down 24 percent from 45,500 VND/kg in March 2013, an 18-month high.

London’s robusta coffee market began to recover last month after three years of decline, although sales from Vietnam slowed and stocks in warehouses tracked by NYSE Liffe fell to their lowest since 2002.

Meanwhile, Mr. Phan Hung Anh, Deputy Director of Anh Minh Coffee Export Company Limited, commented: “The large amount of coffee stored in farms in Vietnam may limit the price increase after Tet. Farmers storing about 1.2-1.3 million tons as present is probably a record level at the beginning of the year. After Tet, farmers will sell more if prices increase and then the increased supply will cause downward pressure on prices."

In a report released on December 13, the Foreign Agricultural Service of the US Department of Agriculture said that coffee reserves in Vietnam will reach 3.82 million 60-kg bags (229,200 tons) by the end of the 2013-2014 crop year starting October 1, compared with 1.97 million bags in the 2012-2013 crop year. Vietnam will export 24.5 million bags out of a total of 28.5 million bags in this year's crop.

Robusta coffee prices rose 24 percent to $1,799 a tonne on December 13, from a 29-month low of $1,447 a tonne on November 14. Coffee futures have risen 2.1 percent to $1,718 a tonne this year, after falling 13 percent in 2013.

According to the General Statistics Office of Vietnam, Vietnam exported 1.29 million tons of coffee in 2013, down 26% from 2012. The amount of coffee in NYSE Liffe's warehouses was 28,200 tons as of January 6.

According to Vietnam +