Vietnam coffee premium may not fall before Tet, Volcafe says

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The premium buyers have to pay for coffee from Vietnam, the world's second-largest producer, may not decline before the Tet festival, according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd.

Vietnamese beans for shipment in February and March were at a premium of $80 a metric ton above the price on the NYSE Liffe exchange in London, up from $50 a ton a week earlier, data from the trader showed.

The Tet celebrations at the end of this month mark the Lunar New Year in the Southeast Asian nation. Farmers usually accelerate sales before Tet.

"The hope for cheaper differentials before Tet has been thrown out the window," Volcafe said in an e-mailed report on Friday. Differentials are a premium or a discount for physical coffee in relation to futures prices.

Vietnam's crop is "excellent" and about 30 percent has already been sold, according to the report.


Farmers are "well-capitalized" and the Vietnamese aren't selling their beans, Kona Haque, a London-based analyst at Macquarie Group Ltd., said Jan. 5.

Robusta coffee for March delivery slid 2 percent to $1,739 a ton by 1:48 p.m. on NYSE Liffe in London.

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