Asian coffee supplies dry up as Vietnam goes on holiday

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Kuala Lumpur, Jan 31: Asian coffee supplies have dried up as farmers in Vietnam, the world’s top robusta producer, expect global prices to strengthen from multi-year highs touched this week on a smaller crop and speculative buying.

The Lunar New Year holidays, which will shut Vietnam for most of next week, could worsen the situation and leave importers scrambling for robusta beans, regional traders said.

“The local sentiment is extremely bullish, farmers prefer coffee to cash in the bank,” said a Singapore-based robusta trader.

Vietnam estimated on Tuesday that its January coffee exports would fall 38.5% from the same month last year to 150,000 tonne, or 2.5 million bags, at the end of the harvest. One bag weighs 60 kgs.

Estimates for Vietnamese robusta crop, which was damaged by rains in November, range widely, with some exporters putting the output figure at as low as 12 million bags and buyers sticking to 20 million bags.

The International Coffee Organisation puts Vietnam’s 2007/2008 crop at 15.95 million bags, down from 18.56 million bags in the previous season.

“The strategy is to talk about lower crops and spread the selling throughout the year, which really benefits the farmers,” said a trader based in Ho Chi Minh City.

He said supplies were tight especially for March and April shipments.