Traders and roasters are stocking up ahead of a projected shortfall in global output this year.
The world’s largest exporter of robusta coffee Vietnam could fall short of the bitter beans in the next two to three months due to rising shipments and dwindling domestic stocks, top exporter Intimex said on Tuesday.
A smaller harvest is expected this year in export rival Indonesia and falling shipments in recent months from top producer Brazil have prompted trading firms and roasters around the world to stock up to intercept the shortfall in Vietnam, traders said.
“In May or June Vietnam will be short (of supply), given it has been actively exporting recently,” Do Ha Nam, general director of Ho Chi Minh City-based Intimex, told VnExpress International.
Intimex is Vietnam’s biggest coffee export company, accounting for about 30 percent of the country’s total shipments.
Nam’s view of the shortfall is in line with a projection made on Monday by Luong Van Tu, chairman of the Vietnam Coffee and Cocoa Association.
Tu said that Vietnam’s coffee exports may dip by between 25-30 percent in the 2017 calendar year due to thin carryover stocks.
The U.S. Department of Agriculture (USDA) estimated Vietnam’s coffee stocks at the end of the 2015/2016 season at 230,000 tons, or 3.83 million bags, down 40 percent from a year ago.
Coffee exports have been rising, and Vietnam’s shipments between October 2016 – the start of the current crop year – and last month totaled 667,000 tons, up nearly 5 percent from a year ago, based on the latest Vietnam Customs data. The crop year runs through September 2017.
In February alone, Vietnam exported 146,400 tons, or 2.44 million bags, the highest volume in a month since 2014, customs data published on March 9 showed. One bag is equivalent to 60 kilograms.
In the same month, Brazil exported 2.48 million bags, its lowest monthly volume since July 2016, based on data published the same day by the Brazilian Coffee Exporters Council.
Last month, Brazil’s Agriculture Ministry sought permission to import 1 million bags of robusta to cover a domestic shortfall, but Brazilian President Michel Temer turned down the plan after farmers said it would hurt them.
“Vietnam may not take away Brazil’s top position in coffee exports, but it will remain the world’s biggest robusta exporter for a while,” Nam from Intimex said.
Last year, Vietnam briefly seized the crown of being the world’s largest coffee exporter in April, a ranking it managed to hold through July 2016, based on monthly customs data and the Brazilian council.
Traders attributed Vietnam’s rising coffee exports so far in the 2016/2017 season to stockpiling by international trading firms and roasters.
“They started to prepare for possible shortages as soon as Vietnam began its current crop year,” a Vietnamese trader at a foreign firm in Ho Chi Minh City said.
Indonesia is projected to harvest 10 million bags of coffee this year, down 17 percent from the previous season, the USDA said in its December 2016 coffee report, citing “severe drought throughout most of the growing regions”.
In Brazil, “robusta production is expected to drop an additional 2.8 million bags to a 10-year low of 10.5 million due to above-average temperatures and prolonged dry spells in Espirito Santo, where the vast majority is grown,” the USDA report said.
Hồ Bình Minh, Vnexpress.net
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