Vietnam latest news - Thanh Nien Daily | Coffee harvest in Vietnam heads for second highest on rains
The coffee harvest in Vietnam, the world’s biggest grower of robusta beans used by Nestle SA (NESN) in instant drinks, will probably be the second largest on record as regular rains boost fruit development.
Production may climb 10 percent to 1.6 million metric tons in the 12 months starting in October from 1.45 million tons a year earlier, according to the median of 13 trader and shipper estimates compiled by Bloomberg. That’s the highest since a record 1.65 million tons in 2011-2012 and 6.7 percent more than the median in a survey published in May.
A bigger crop may curb a rally in prices from a 32-month low in June, spurred by Vietnamese farmers holding back beans and sales slowing in third-ranking Indonesia before the Muslim fasting month of Ramadan. Prices are still down 15 percent from the March high, when dry weather in Vietnam threatened to cut output as much as 30 percent. The drought ended in May with rainfall this month forecast to be above a 30-year average.
“The weather is now perfect with regular rains,” said Tran Tuyen Huan, Ho Chi Minh City-based general director of Asia Commodities Joint-Stock Co. “The number of cherries formed on each branch is higher this year as the trees had some rest last year when the harvest fell.”
Robusta for September delivery rose 0.6 percent to $1,894 a ton on NYSE Liffe at 10:25 a.m. in London. Prices touched a low of $1,704 on June 14 and a five-month high of $2,216 on March 13. In Dak Lak province, which represents about 30 percent of Vietnam’s output, beans cost 39,800 dong ($1.88) a kilogram (2.2 pounds) yesterday, data from the Daklak Trade & Tourism Center show. That’s down from a 17-month high of 45,500 dong in March.
More rain
The Central Highlands region, which includes Dak Lak, may get more rain this month than average, the National Center for Hydro-Meteorological Forecasting said July 1. Buon Ma Thuot, the capital of Dak Lak, may get as much as 350 millimeters (14 inches), compared with the 30-year average of 266 millimeters.
Unsold beans of the current crop may be 220,000 tons, or 22 percent more than 180,000 tons a year earlier, according to the survey of traders and shippers. Exports from October to June are estimated at 1.19 million tons, compared with 1.31 million tons a year earlier, according to preliminary data from the General Statistics Office compiled by Bloomberg.
“I didn’t sell much when prices were high because just like many people, I was greedy and hoping they would go even higher,” said Tran Thi Loan, a farmer in Dak Lak. “Now that prices have dropped, I feel sorry and even less motivated to sell, so I’ll wait for them to go back up again.”
Unsold beans
Loan said she has kept about a third of the four tons she harvested from the 2012-2013 crop, more than the year before.
The “Vietnamese are likely to keep holding on to what is left of the remaining 2012-13 coffee crop, causing premiums to rise again against London futures,” Kona Haque, a London-based analyst at Macquarie Group Ltd. (MQG), Australia’s biggest investment bank, said in a report e-mailed July 9.
Coffee from Indonesia, gathering its 2013-2014 crop, was at a premium of $230 a ton to the NYSE Liffe price last week, Volcafe Ltd., the coffee unit of commodities trader ED&F Man Holdings Ltd., said in a report e-mailed on June 28. Beans from Vietnam held a premium of $140, data from the trader showed.
Indonesia coffee premiums fall, undercut Vietnam prices
http://www.reuters.com/article/2013/07/18/coffee-physicals-idUSL4N0FO14U20130718
* Sumatran premiums down to $80-$100/T from $200 last week
* Vietnam premiums unchanged at 2-year peak up to $130/T (Adds quotes, background)
By Lewa Pardomuan
SINGAPORE, July 18 (Reuters) - Premiums for Indonesian robusta fell to their weakest level since April on Thursday after farmers increased deliveries to raise cash ahead of a Muslim festival, spurring buying by local roasters.
The fall in premiums to $80-$100 a tonne, down from $200 last week, may also prompt foreign buying as sellers in rival producer Vietnam are still offering robusta at premiums of up to $130 to London futures, their highest in two years, dealers said.
Daily arrivals in the main growing island of Sumatra jumped to as high as 3,000 tonnes, compared with about 1,000 tonnes in mid-May. Indonesia, the world's third-largest coffee producer, is also the second-largest grower of robusta after Vietnam.
"The beans have been traded at $100 premiums FOB. We also see offers at $80 but only from small suppliers who want to sell 36 or 40 tonnes of beans," said a dealer in Sumatra, referring to the grade 4,80 defect robustas.
"Many trading houses are still focusing on fulfilling deliveries. Premiums have come down because supply is improving and also because London futures have gone up."
Dealers saw buying interest from local roasters and processed food producers, such as PT Mayora Indah. Strong domestic demand will boost Indonesia's consumption in 2013/14 by nearly a third to more than four million 60-kg bags, according to a Reuters poll.
Heavy rains during the current crop in Sumatra have disrupted deliveries from plantations and the drying of beans. Premiums jumped as high as $200 a tonne earlier this month, the highest since 2012, although deals were struck at $150 premiums.
Differentials for Vietnam's grade 2, 5 percent black and broken beans were steady at $100 to $130 a tonne this week as farmers held on to their beans, hoping for higher global prices and better returns.
Indonesia and Vietnam together account for nearly a quarter of the world's coffee output. Robusta is either blended with higher-quality arabica beans for a lower-cost brewed coffee or processed into instant coffee.
"We haven't bought more Vietnamese beans so far. We're trying to get more beans from Indonesia. It's still much cheaper. I think we should be able to get the 80 defect beans at less than $100 premiums in bulk," said a dealer in Singapore.
"You can see supply is coming in," he added.
Indonesian farmers were selling more beans to trading houses as the weather improved and because they also needed extra cash to celebrate Eid al-Fitr in early August, which marks the end of the Muslim fasting month of Ramadan.
Indonesia is the world's most populous Muslim nation.
"Daily arrivals have improved to 2,500 to 3,000 tonnes since last week. I guess farmers need to cover their daily needs," said a dealer in Java, adding that sales had only gone to local buyers at present.
London September robusta ended up $4 at $1,950 a tonne on Wednesday, after jumping to $1,979, the highest price since May 24, tracking New York arabica on fears of a frost threat in top producer Brazil. (Editing by Richard Pullin)
* Sumatran premiums down to $80-$100/T from $200 last week
* Vietnam premiums unchanged at 2-year peak up to $130/T (Adds quotes, background)
By Lewa Pardomuan
SINGAPORE, July 18 (Reuters) - Premiums for Indonesian robusta fell to their weakest level since April on Thursday after farmers increased deliveries to raise cash ahead of a Muslim festival, spurring buying by local roasters.
The fall in premiums to $80-$100 a tonne, down from $200 last week, may also prompt foreign buying as sellers in rival producer Vietnam are still offering robusta at premiums of up to $130 to London futures, their highest in two years, dealers said.
Daily arrivals in the main growing island of Sumatra jumped to as high as 3,000 tonnes, compared with about 1,000 tonnes in mid-May. Indonesia, the world's third-largest coffee producer, is also the second-largest grower of robusta after Vietnam.
"The beans have been traded at $100 premiums FOB. We also see offers at $80 but only from small suppliers who want to sell 36 or 40 tonnes of beans," said a dealer in Sumatra, referring to the grade 4,80 defect robustas.
"Many trading houses are still focusing on fulfilling deliveries. Premiums have come down because supply is improving and also because London futures have gone up."
Dealers saw buying interest from local roasters and processed food producers, such as PT Mayora Indah. Strong domestic demand will boost Indonesia's consumption in 2013/14 by nearly a third to more than four million 60-kg bags, according to a Reuters poll.
Heavy rains during the current crop in Sumatra have disrupted deliveries from plantations and the drying of beans. Premiums jumped as high as $200 a tonne earlier this month, the highest since 2012, although deals were struck at $150 premiums.
Differentials for Vietnam's grade 2, 5 percent black and broken beans were steady at $100 to $130 a tonne this week as farmers held on to their beans, hoping for higher global prices and better returns.
Indonesia and Vietnam together account for nearly a quarter of the world's coffee output. Robusta is either blended with higher-quality arabica beans for a lower-cost brewed coffee or processed into instant coffee.
"We haven't bought more Vietnamese beans so far. We're trying to get more beans from Indonesia. It's still much cheaper. I think we should be able to get the 80 defect beans at less than $100 premiums in bulk," said a dealer in Singapore.
"You can see supply is coming in," he added.
Indonesian farmers were selling more beans to trading houses as the weather improved and because they also needed extra cash to celebrate Eid al-Fitr in early August, which marks the end of the Muslim fasting month of Ramadan.
Indonesia is the world's most populous Muslim nation.
"Daily arrivals have improved to 2,500 to 3,000 tonnes since last week. I guess farmers need to cover their daily needs," said a dealer in Java, adding that sales had only gone to local buyers at present.
London September robusta ended up $4 at $1,950 a tonne on Wednesday, after jumping to $1,979, the highest price since May 24, tracking New York arabica on fears of a frost threat in top producer Brazil. (Editing by Richard Pullin)
Indonesia: Threat to coffee exports
Indonesia: Threat to coffee exports
Asia | 19 Jul 2013
A combination of short- and long-term factors are putting at risk Indonesia’s position as one of the world’s leading coffee producers, while rising domestic demand could eat into stocks available for the profitable export market.
The coffee sector is a major contributor to Indonesia’s agriculture exports, generating revenue of $1.25bn last year, while its annual production of around 700,000 tonnes of coffee ranks it third behind world leaders Brazil and Vietnam. The industry supports at least 1.4m growers and many more employees, most of whom are located in provinces of Lampung, South Sumatra and Bengkulu. While the bulk of local production is Robusta, a bitter coffee variant used in instant drinks and espresso, some 22% of total output is the less caffeinated Arabica species.
Indonesia’s place as the third-ranked global producer is under threat by the country it supplanted in the 2008/09 season, Colombia. The Latin American grower has been steadily increasing output over the past few years as new plantings have started to yield crops, replacing production capacity lost some five years ago to a severe bout of coffee rust, a fungus that blighted many established trees.
A combination of storms that damaged buds in December and January and more recent heavy rains that delayed the season’s harvest into June, one month late, is expected to affect Indonesia’s output in some areas, and possibly push down stocks available for export. According to a report compiled by the Bloomberg news agency in mid-June based on estimates from local experts, the crop available for export this year could amount to 6.42m 60-kg bags, the equivalent of 385,000 tonnes, from a harvest just under 600,000 tonnes or 9.92m bags, well down on the averages of recent years.
Growing competition and bouts of unfavourable weather are not the only issues that the industry faces. Another is the increasing age of many of the trees in production. According to the Indonesian Coffee and Cocoa Research Institute (ICCRC), many of the trees were planted more than 20 years ago, meaning they are above the five- to 20-year age range for optimum production, with older trees being up to 30% less productive.
“The reality is that many of the crops are already old,” the ICCRC said in a statement issued in early June. “This problem is like a time bomb that can threaten the coffee industry any time and change Indonesia’s status from a coffee exporter into an importer.”
With new plantings adding only 0.02% a year to the area under cultivation, the institute said this meant plantations were aging quickly, putting at risk output and revenue, the ICCRC said.
“Production, farmers’ revenue and state foreign-exchange receipts would also weaken,” the statement said. “It is therefore necessary for co-operation to take place between various sides, including the government, the private sector, entrepreneurs and farmers who all play a direct role in the coffee production chain and business.”
In a recent report, the US Department of Agriculture also noted that Indonesia’s coffee sector had an “abundance of older, less productive trees” that were more prone to being affected by severe weather patterns. Added to this, the department said, efforts to replace older trees with new plantings had been slowed by what it said were bureaucratic problems between local and central government.
Though the ICCRC’s warning about Indonesia becoming a net importer of coffee is unlikely, given the sheer volume of production, rising domestic demand has reduced the amount available for export. While forecasts are that production this year will remain flat or post a modest increase, predictions are that domestic demand will grow to as much as 4m 60-kg bags over the coming year. This represents a one-third increase on previous domestic consumption levels, and equates to well over 35% of total output.
Moelyono Soesilo, the purchasing and marketing manager at Java-based exporter Taman Delta Indonesia, told the Reuters news agency in mid-May that the rising domestic demand was the result of more Indonesians acquiring the coffee habit.
“Local consumption is getting higher because more young people love to drink coffee,” he said. “Local coffee shops and independent, small roasters are flourishing. We will see that in the next three to five years, it is easy to increase local consumption to 7m-8m bags.”
To meet this rising domestic demand while still maintaining its position in the top three international producers, either the total area under cultivation will need to be expanded or a cull of aged trees conducted to gradually boost yields. Either way, it would be a matter of five years or so before new trees became fully productive, meaning Indonesia could see its global market share eroded as rivals such as Colombia move to boost output.
Asia | 19 Jul 2013
A combination of short- and long-term factors are putting at risk Indonesia’s position as one of the world’s leading coffee producers, while rising domestic demand could eat into stocks available for the profitable export market.
The coffee sector is a major contributor to Indonesia’s agriculture exports, generating revenue of $1.25bn last year, while its annual production of around 700,000 tonnes of coffee ranks it third behind world leaders Brazil and Vietnam. The industry supports at least 1.4m growers and many more employees, most of whom are located in provinces of Lampung, South Sumatra and Bengkulu. While the bulk of local production is Robusta, a bitter coffee variant used in instant drinks and espresso, some 22% of total output is the less caffeinated Arabica species.
Indonesia’s place as the third-ranked global producer is under threat by the country it supplanted in the 2008/09 season, Colombia. The Latin American grower has been steadily increasing output over the past few years as new plantings have started to yield crops, replacing production capacity lost some five years ago to a severe bout of coffee rust, a fungus that blighted many established trees.
A combination of storms that damaged buds in December and January and more recent heavy rains that delayed the season’s harvest into June, one month late, is expected to affect Indonesia’s output in some areas, and possibly push down stocks available for export. According to a report compiled by the Bloomberg news agency in mid-June based on estimates from local experts, the crop available for export this year could amount to 6.42m 60-kg bags, the equivalent of 385,000 tonnes, from a harvest just under 600,000 tonnes or 9.92m bags, well down on the averages of recent years.
Growing competition and bouts of unfavourable weather are not the only issues that the industry faces. Another is the increasing age of many of the trees in production. According to the Indonesian Coffee and Cocoa Research Institute (ICCRC), many of the trees were planted more than 20 years ago, meaning they are above the five- to 20-year age range for optimum production, with older trees being up to 30% less productive.
“The reality is that many of the crops are already old,” the ICCRC said in a statement issued in early June. “This problem is like a time bomb that can threaten the coffee industry any time and change Indonesia’s status from a coffee exporter into an importer.”
With new plantings adding only 0.02% a year to the area under cultivation, the institute said this meant plantations were aging quickly, putting at risk output and revenue, the ICCRC said.
“Production, farmers’ revenue and state foreign-exchange receipts would also weaken,” the statement said. “It is therefore necessary for co-operation to take place between various sides, including the government, the private sector, entrepreneurs and farmers who all play a direct role in the coffee production chain and business.”
In a recent report, the US Department of Agriculture also noted that Indonesia’s coffee sector had an “abundance of older, less productive trees” that were more prone to being affected by severe weather patterns. Added to this, the department said, efforts to replace older trees with new plantings had been slowed by what it said were bureaucratic problems between local and central government.
Though the ICCRC’s warning about Indonesia becoming a net importer of coffee is unlikely, given the sheer volume of production, rising domestic demand has reduced the amount available for export. While forecasts are that production this year will remain flat or post a modest increase, predictions are that domestic demand will grow to as much as 4m 60-kg bags over the coming year. This represents a one-third increase on previous domestic consumption levels, and equates to well over 35% of total output.
Moelyono Soesilo, the purchasing and marketing manager at Java-based exporter Taman Delta Indonesia, told the Reuters news agency in mid-May that the rising domestic demand was the result of more Indonesians acquiring the coffee habit.
“Local consumption is getting higher because more young people love to drink coffee,” he said. “Local coffee shops and independent, small roasters are flourishing. We will see that in the next three to five years, it is easy to increase local consumption to 7m-8m bags.”
To meet this rising domestic demand while still maintaining its position in the top three international producers, either the total area under cultivation will need to be expanded or a cull of aged trees conducted to gradually boost yields. Either way, it would be a matter of five years or so before new trees became fully productive, meaning Indonesia could see its global market share eroded as rivals such as Colombia move to boost output.
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