Vietnam’s coffee exports may slow after rising in April as traders hold back to assess the impact of the current drought on the crop and exporters curb sales in anticipation of further price gains, traders said on Tuesday.
The ICE robusta July contract surged to an intraday high of $1,602 a ton on April 21, the highest since Dec. 10, 2015, after a Vietnamese industry official forecast the country’s 2016 exports will fall to 1 million tons, the lowest in a decade.
But holders of Vietnamese beans later in the session sold futures to lock in prices, pushing the contract to end lower, said independent analyst Nguyen Quang Binh. Vietnam is the world’s top robusta producer.
“Sales are slowing toward the end of April as the market monitors production of the next crop, while stocks are being held back on fears of lower output,” a private trader in Ho Chi Minh City said, noting that robusta exports were stronger this month.
Vietnam shipped 101,600 tons of coffee between April 1-15, a surge of 79 percent from the same period last year, Vietnam Customs data show. So far this year, the country has exported 579,000 tons (9.65 million 60-kg bags) of coffee, up 36 percent from a year ago, the data showed.
On Tuesday, robusta prices edged up to 34,200 dong to 34,400 dong ($1.53 to $1.54) per kg in Daklak, Vietnam’s biggest growing province, from 33,800 dong to 34,000 dong a week ago.
The Vietnamese prices closely track the London futures market, where the July contract ended up 0.9 percent at $1,571 a ton on Monday on lower yields at the start of Brazil’s harvest.
Vietnamese robusta grade 2, 5 percent black and broken beans, were quoted at premiums of $40-$60 a ton to the July contract, similar to last week’s range of premiums of $45-$60 a ton.
Vietnam’s coffee exports this year should be above the 1 million tons that the Vietnam Coffee and Cocoa Association forecast last week, traders said, citing shipments so far in 2016.
“It’s just four months now and the total volume already rose beyond 500,000 tons, so it is impossible that it will export 60,000 tons a month for the rest of the year,” another trader at a foreign firm in Ho Chi Minh City said.
Last year the country’s monthly export volume averaged 112,000 tons, down from 141,000 tons in 2014, based on government data.