Vietnam coffee to reach EU next month at earliest, Volcafe says

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Coffee beans from the season started last month in Vietnam, the world's largest producer of the robusta variety, will reach Europe by mid-December at the earliest, helping erode stockpiles, Volcafe said.

Robusta stockpiles with valid grading certificates in warehouses monitored by NYSE Liffe were 311,670 metric tons as of Nov. 14, down 6.2 percent from 332,280 tons two weeks earlier, according to figures on the exchange's website.

Certified stocks "continue to decline in a moderate style," Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd., said in a weekly report e-mailed Friday. "Guess we will see the same pattern until the first shipments out of origin arrive mid-December or even later."

Exports will be delayed because of slow steaming by shipping companies, Volcafe said. Slow steaming is the practice of reducing a ship's normal speed to cut fuel costs.

Vietnam will produce a record 22 million bags of 60 kilograms (132 pounds) in the 2011-12 season, up from 20 million bags in 2010-11, the Winterthur, Switzerland-based trader estimated in its latest quarterly report.

"The dry and sunny weather is good for the harvest," it said. "Quality and yields are starting to look promising."

Local prices remain high and demand is "good," according to the report. Vietnamese beans for December and January loading were at a discount $20 a ton below the price on the NYSE Liffe exchange in London, Volcafe data show.

In Indonesia, the third-largest robusta grower, the 2012-13 harvest is "expected to recover from this year's disastrous crop," Volcafe said. Roasters, traders and exporters there are currently buying beans from Vietnam, it said.

La Nina

Indonsian coffee production slumped to 7.9 million bags in the 2011-12 season, down from 9.3 million bags in 2010-11, data from the US Department of Agriculture show, after rains caused by La Nina weather conditions hurt the crop. The season there usually starts in April.

Robusta, which is used in instant coffee and espresso, is harvested mostly in Asia and parts of Africa. Arabica beans are used in specialty drinks such as those made by Starbucks Corp. and are grown mainly in Latin America.

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