Vietnam's coffee sales to set a record
HO BINH MINH & HANOI - Vietnam’s 2007 coffee sales are forecast to rise to a record 18.33 million bags, surpassing a high in 2001 that saw world prices plunge to 30-year lows, traders said.
A global deficit should rescue prices this time, they added.
Coffee exports are forecast to grow 22.6% even though shipment in the second half could drop 23% to 5 million 60-kg bags, Vietnam Coffee Association chairman Van Thanh Huy was quoted by Wednesday's state-run Saigon Times Daily as saying.
The annual forecast would break the previous high of 15.2 million bags, or 910,000 tonnes, in 2001, when Vietnam was blamed for flooding the world's coffee market, sending prices to their 30-year lows. “But this time prices would not be hurt as the industry has already forecast a deficit world-wide for the next 2007-2008 crop,” a trader with a foreign firm in Ho Chi Minh City said.
A poll of 21 analysts and traders on July 10 showed global output for the 2007-2008 crop would fall 6.5% to 118 million bags, while consumption would edge up 1.4% to 122 million bags, resulting in a deficit of 4 million bags.
London's benchmark Robusta contract was forecast to end the year at $1,785 a tonne and fall to $1,656 by end 2008 — both above the contract's close at the end of 2006 of $1,590, but down from a recent nine-year peak of $1,945.
Chairman Huy told a trade ministry meeting that the coffee export revenues could total $1.5 billion for the whole of this year, up from $1.1 billion last year according to government statistics.
Huy's forecasts are based on the calendar year ending in December, while Vietnam’s coffee crop year lasts between October and September. — Reuters
“The forecast could be true as Vietnam often exports 200,000 tonnes during the first three months of its new crop year, while shipment between now and September may hit 100,000 tonnes,” the Ho Chi Minh City-based trader said, adding that only a thin stock remained.
Vietnamese Robusta edged up to 27,800 dong-28,000 ($1.72-$1.173) per kg this week from 27,700 dong last week but trade has slowed to a trickle due to supply shortages in the period between crops, traders said.
Despite the fall forecast for the last six months, the volume for the whole of 2007 would be reached as January to June's shipment surged 63.8% to 13.9 million bags, or 831,500 tonnes, thanks to strong demand partly from rival Robusta grower Indonesia, government statistics showed.
Vietnam exported 674,200 bags of coffee, or 40,453 tonnes, to Indonesia in the first half, a 45-fold increase from a year earlier, as dry weather delayed Indonesia's own harvest and sent its exporters and roasters looking for other supplies.
Reuters - July 26, 2007.
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