Vietnamese coffee trades at London price as a third of crop sold

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Buyers of coffee from Vietnam, the world's largest producer of the robusta variety, are paying the same price for their beans as the futures in London, with about a third of the crop already sold, according to Volcafe Ltd.

This week's price compares with a premium of $20 a metric ton to the NYSE Liffe exchange price in the week ended Dec. 21, the Winterthur, Switzerland-based unit of commodities trader ED&F Man Holdings Ltd. said in a weekly report e-mailed today. Robusta coffee futures climbed 3.1 percent over the same period. The premium, known as the differential, usually drops when futures rise. The 2012-13 season in Vietnam started on Oct. 1.

"Farmers continue to sell at a steady pace into the rising market at slightly softer differentials," Volcafe said in the report. The Vietnamese export market "has been active as can be seen from heavy shipments and rising Ho Chi Minh City stocks, with good demand keeping prices steady."

Vietnam's coffee exports were estimated at 201,000 tons in December by the Ministry of Agriculture and Rural Development. Shipments climbed 40 percent to 1.76 million tons last year, according to a report published Dec. 26. The country will produce 25 million bags of coffee in 2012-13, down from 26 million bags a year earlier, the US Department of Agriculture estimates. A bag of coffee usually weighs 132 pounds.

Beans are bigger than expected "even with the much lower rainfall last year," Volcafe said. "Good harvest weather has meant moisture and defects are lower also."

The weather in Vietnam is sunny and cool, "normal" for this time of the year, according to the trader's report. Rainfall was 10 percent below average last year, it said.

In Indonesia, the third-biggest robusta grower, buyers are paying a premium of $150 a ton to the exchange price, unchanged from Dec. 21, Volcafe said. Bean arrivals at ports were "very slow," in the in the range of 180 to 220 tons, the trader said.

Robusta coffee for March delivery was 0.4 percent higher at $1,953 a ton in London recently.

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