Coffee Stockpiles With Vietnam Farmers Seen at Two-Year Low
By Diep Ngoc Pham Jul 7, 2014 10:10 AM GMT+0700Cách chọn ngôn ngữ tiếng Việt: Trong Translate kích vào Select Language, lần đầu chọn một ngôn ngữ bất kỳ sau đó lần thứ hai chọn ngôn ngữ Vietnamese.
Photographer: Jeff Holt/Bloomberg
A worker pours green robusta coffee beans into a grader at the Highlands Coffee processing plant in Ho Chi Minh City. Shrinking stockpiles and a smaller crop in Vietnam may bolster futures in London which have climbed 23 percent this year on speculation demand will outstrip supply...Read More
Coffee farmers in Vietnam, the top grower of the robusta variety used by Nestle SA, are probably holding the smallest inventory of unsold beans since 2012 after a record crop, underlining prospects for a global shortage.
Reserves at the end of last month were 15 percent of the harvest, compared with 18 percent in June 2013, the median of estimates from nine traders and analysts compiled by Bloomberg show. That’s the lowest proportion for this time of year since 2012. Production may drop 4 percent to 1.65 million metric tons in the year starting October from a record 1.72 million tons a year earlier, the survey showed. That’s little changed from 1.64 million tons estimated by traders and analysts last month.
Shrinking stockpiles and a smaller crop in Vietnam may bolster futures in London which have climbed 22 percent this year on speculation demand will outstrip supply. The shortfall is estimated at 1.6 million bags, or 96,000 tons, by Volcafe Ltd. in the 12 months starting October. Rabobank International increased its robusta price forecasts this month, citing lower inventories and a looming El Nino that could parch parts of Asia. Brazil and Indonesia are the top growers after Vietnam.
“Vietnamese farmers are not interested in selling at this price level, especially as they hear about lower output in Brazil and Indonesia,” said Phan Hung Anh, deputy director of Dak Lak-based Anh Minh Co., Vietnam’s largest private exporter by shipping volume. “The fact that they have lower stockpiles and are not willing to sell will probably drive prices higher.”
Prices Rally
Farmers had 252,000 tons of unsold reserves at the end of June from 263,000 tons a year earlier when the crop was 1.5 million tons, according to the survey. Stockpiles fell as growers boosted sales in June, when robusta prices rallied 4.1 percent in London after an 11 percent slump the previous month.
Robusta ended at $2,056 a ton on NYSE Liffe on July 4, rising 10 percent from a three-month low on June 10. Arabica, the variety favored for specialty drinks such as those made by Starbucks Corp., settled at $1.718 a pound on ICE Futures U.S. in New York on July 3 for an advance of 55 percent in 2014.
The global market, including arabica and robusta, will have a shortage of 11.3 million bags in 2014-2015, the most in more than a decade, from a surplus of 4.7 million bags this year, Volcafe, a unit of trader ED&F Man Holdings Ltd., said June 3. The estimate takes into account production losses from a drought in Brazil, which is the world’s biggest arabica grower, and smaller crops in Vietnam and in Indonesia.
Weather Threat
The increase in arabica has widened its premium over cheaper robusta beans to about 78 cents a pound on July 3 from a five-year low of 27.9 cents in December. That’s encouraging more roasters to buy robusta, Kona Haque, head of commodities research at ED&F Man in London, said on July 3.
“With El Nino scheduled to arrive in September, we foresee further downward production revisions,” Rabobank analysts including Tracey Allen in London wrote in a report. The bank raised its fourth-quarter forecasts by $50 a ton to $1,900 and the estimate for Jan.-March 2015 by $100 to $1,900.
“Rains have been regular, aiding crop development,” said Anh of Anh Minh Co. “However, water levels are lower than usual so that may cause a shortage in the next season.”
Rainfall recorded in Dak Lak averaged 264.07 millimeters in June at 10 stations, including one in neighboring Dak Nong province, compared with 295.96 millimeters in June last year, according to the Meteorology and Hydrology Department in Dak Lak province, which represents about 30 percent of the harvest.
Average water levels in rivers and streams in Dak Lak in the last 10 days of June were 0.3 meter to 0.5 meter lower than the same period last year and 0.2 meter to 0.4 meter less than the average in previous years, the weather office said July 1.
Australia’s Bureau of Meteorology said this month that it maintained an alert for an El Nino developing by September. The event may bring drought to the Asia-Pacific region and heavier-than-usual rains to South America.
To contact the reporter on this story: Diep Ngoc Pham in Hanoi at dpham5@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Ovais Subhani
Indonesia tăng tiêu thụ nội địa
Coffee Consumption in Indonesia Seen Climbing to Record in 2016
By Yoga Rusmana May 7, 2014 2:06 PM GMT+0700Coffee consumption in Indonesia, the third-biggest grower of the robusta variety, may jump 33 percent to a record in the next two years as population and income increase in Southeast Asia’s largest economy.
Demand will probably rise to 400,000 metric tons in 2016 from an estimated 300,000 tons this year and 260,000 tons in 2013, Irfan Anwar, chairman of the Association of Indonesian Coffee Exporters and Industries, told reporters at a conference in Jakarta today. Output may total about 700,000 tons in 2014 from 650,000 to 7000,000 tons estimated for last year, he said.
Rising domestic consumption may reduce supplies from Indonesia, where robusta accounts for about 80 percent of the output, and help a surge in prices of the beans used by Nestle SA (NESN) in instant drinks. Futures of the more expensive arabica variety, brewed by specialty companies including Starbucks Corp., advanced in New York to a two-year high in March as drought threatened crops in Brazil, the top supplier. Robusta traded in London has jumped 28 percent this year.
“Population is increasing, income per capita is increasing and lifestyle is improving,” said Irfan, who estimated that the share of arabica production will rise to 25 percent in three years from 19 percent in 2013. “Improvement in coffee quality is also helping boost consumption.”
Arabica has surged 83 percent this year to $2.0225 a pound on ICE Futures U.S. yesterday, the biggest advance among 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. Robusta traded at $2,147 a ton on NYSE LIFFE.
Growing Demand
Indonesia became the world’s eight-largest coffee consumer in 2012 and second to Japan in theEast Asia and Southeast Asia region, according to International Coffee Organization. The country produced 10.5 million bags of coffee in 2012-2013 of which 8.9 million bags were exported, U.S. Department of Agriculture data show. A bag weighs 60 kilograms or 132 pounds.
“Consumption has been increasing quickly, averaging 6.6 percent growth since 2000, and 5 percent per annum going back to 1990,” London-based ICO said in a report released this year. “With a population of nearly 250 million, per capita consumption is less than 1 kilogram per person, and shows significant potential for further growth.”
Indonesia’s economy has expanded under 6 percent for four consecutive quarters through March and domestic consumption accounted for more than half of that growth.
Arabica beans accounted for 59 percent of the world’s 153.3 million bags of coffee output in 2012-2013, according to USDA data. Indonesia produced 1.7 million bags of arabica that year to become Asia’s top producer of the beans, replacing India, USDA data show. Vietnam is the world’s biggest grower of robusta, followed by Brazil.
To contact the reporter on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Ovais Subhani, Thomas Kutty Abraham
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