Thursday 30 May 2024
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Vietnam’s coffee export plunge could raise global supply concerns

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HANOI, Vietnam – Lower outflow from Vietnam, coupled with falling exports from Brazil, could reduce the downward pressure on prices created by ample stocks in importing nations.

Vietnam’s coffee exports fell last month by more than a fifth from the same period last year, extending a downward trend that started in March following a smaller harvest this season and a higher ratio of low-quality beans, government data showed.

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June shipments fell 22.7 percent from a year ago to 122,200 tons, or 2.04 million 60-kg bags, based on Vietnam Customs data released on Tuesday.

Lower outflow from the Southeast Asian nation, coupled with falling exports from top producer Brazil, could reduce the downward pressure on prices created by ample stocks in importing nations, according to the International Coffee Organization (ICO).


Vietnam’s coffee export volume in May fell to its lowest in six months after growers finished harvesting 26.7 million bags from the 2016/2017 season in January, down 7.7 percent from the previous crop, based on a U.S. Department of Agriculture (USDA) report published in June.

The exportable volume of coffee left in Vietnam at the start of this month stood at 7.56 million bags, down nearly 30 percent from the same time in 2016, based on customs data and USDA figures for output, carryover stock and consumption.

“Exporters in Vietnam, especially FDI firms, do not face any shortages,” a Vietnamese trader based in the Central Highlands province of Dak Lak said.

Vietnam’s coffee outflow has been dropping since March because several major exporters have reduced loading due in part to thinner supply on the domestic market, while a larger proportion of bad-quality beans have also eaten into the volume of exportable beans, the dealer said.

Unseasonal rain between October and December last year in Vietnam’s Central Highlands coffee belt not only delayed the harvest but also raised the ratio of black and broken beans, which are counted as defects in export terms.

June’s shipments brought Vietnam’s total coffee exports in the three quarters ending June in the current 2016/2017 crop year to 1.21 million tons, or 20.17 million bags, down 8.6 percent from a year ago, based on data compiled by the customs department. Vietnam’s coffee season runs from October to September.

Robusta bean prices in Vietnam trailed the rise, advancing to VND44,900-45,100 ($1.98-$1.99) per kg on Thursday in Dak Lak, the country’s biggest growing province, from VND44,400-44,600 the previous day.

Vietnamese robusta grade 2, 5 percent black and broken from the last harvest was being quoted at discounts of $40-$50 a ton to November robusta futures contract, while beans of the same grade from the next harvest due to begin in October were also offered at similar discounts to the January contract.

On June 22, exporters switched their quotations to discounts of $10-$20 a ton to London’s futures, the first discounts offered since late April.

Ho Binh Minh


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