"The situation is that nobody wishes to make any deal unless the price is very attractive. Vietnamese traders are seeking deals at prices higher than $1,300," said an international coffee trader, adding that a small lot of coffee was sold over the past week.

"It is psychological reasons that have slowed the market as people are thinking of the impact of bad weather on Brazil's coffee crop and the elections in Indonesia," said one Vietnamese coffee exporter.

Vietnam's robusta grade two coffee, five per cent black and broken, was quoted at a tighter range of $1,280-1,290 a tonne, FOB Saigon Port late on last Thursday, against last week's level of $1,270-1,320.

Traders said they were unclear whether Indonesia's June 7 elections would disrupt coffee supplies. They said the market was confused overconflicting reports from Indonesia that Jakarta planned an export tax on certain commodities in order to protect the local agriculture industry.

Indonesia's trade and industry minister Rahardi Ramelan said that coffee, rubber, cocoa and copra exports would be taxed but he gave no details or the possible timing for the move.

A senior Indonesian agricultural official said later on Wednesday that Jakarta planned export taxes on cashewnuts, raw leather and unfermented cocoa beans, but had no intention of taxing exports of tea and coffee.

London July closed on Thursday $2 down at $1,520 a tonne, while September also ended at the same level.

Vietnamese traders said the July price would be applied until June 10, which would then be followed by the September level. London September was already applied for deals signed for shipment in July or August, they added.

Traders estimated that Vietnam still holds 60,000-70,000 tonnes of coffee from its previous 1998/99 crop. Next crop harvests are due to start inOctober and would normally last until January.

An exporter from Vietnam's main coffee producing province of Daklak said his company had received inquiries from Japanese traders seeking high quality coffee.

"They inquire about grade two, one per cent black and broken beans. It's good as we can decide the price independently from London or New York," he said.

Japanese traders said that hey were focusing on Vietnamese coffee as a possible replacement for Indonesian robusta in case of supply disruptions if political upheaval follows Monday's poll.

Japan imported 2,510 tonnes of Vietnamese coffee in April, up 35.2 per cent over the same month last year. Vietnam, one of the world's top robusta exporters, plans to export 3,80,000 tonnes of coffee this year against 3,79,000 tonnes in 1998. It has exported 1,82,000 tonnes during the January-May period, up 4.6 per cent over the same period last year, official statistics show.