Coffee price crashes on prospect of bumper crop
HCM CITY — With the prospects of a bumper crop looming, coffee prices have slumped in the domestic market.
In the western part of the Central Highlands, 2.5 per cent black and broken coffee traded at VND42,000-43,000 per kilogramme yesterday, down from VND49,000 – VND50,000 in late August, mainly due to the dramatic fall in Robusta coffee prices on the futures market.
Since the end of last month, September futures on London International Financial Futures and Options Exchange (Liffe) traded at around US$2,360-2,370 per tonne. It fell by more than US$400 per tonne yesterday to $1,950.
"Traders in my village paid only VND43,000 per kilo-gramme for my coffee. The market has come down so quickly that we [Central Highlands farmers] are facing losses in the new crop," Dlyieya, an ethnic coffee grower in Dak Lak Province, said.
But export prices are some $100 per tonne higher, too high for exports.
"I had to buy coffee in Europe for delivery to my customers in Europe," Phan Minh Thong, director of Binh Duong-based Phuc Sinh Co, told a meeting of the 20 biggest coffee exporters last week.
Thong said the selling price of 2 per cent black and broken was plus $100 over Liffe for coffee in store in Europe, $100 lower than what he could buy in the local market.
Luong Van Tu, chairman of Viet Nam Coffee Association said coffee production next year – from the crop beginning in October – could be around 1.1 million tonnes, almost the same as the current crop which will be harvested on September 30.
Bloomberg said last Friday that its poll of traders found the current coffee crop could be a record 1.32 million tonnes. — VNS