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Coffee output sees 7 percent increase

HANOI - Unseasonal rain in recent days has slowed Vietnam's coffee harvest, while premiums of the country's robusta beans widened this week as more beans arrived at the market, traders said on Tuesday.

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Coffee beans are displayed at an exhibition in Hanoi, Vietnam. REUTERS/Kham

HANOI - Unseasonal rain in recent days has slowed Vietnam's coffee harvest, while premiums of the country's robusta beans widened this week as more beans arrived at the market, traders said on Tuesday.

The world's largest robusta producer has completed about two thirds of its 2015/2016 coffee harvest, with at least 70 percent finished in the top growing province of Daklak, traders said, slightly behind a year ago.

"It's been overcast for a week now, with drizzling in the past two days, and this has slowed the harvest, preventing cherry drying," said a trader in Buon Ma Thuot city, the capital of Daklak, Vietnam's top growing province.

The rain has caused some early flowering, which has to come after the harvest ends, but the current partial blossom will not affect the next 2016/2017 production, the trader said.

Besides, Daklak is forecast to get mostly sunny days by the end of December, according to AccuWeather.

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The rainy season ended in early October and will not return to the Central Highlands coffee belt until next May.

Supply is ample, given some 30 percent of the harvested cherries have been available for export, but farmers are still reluctant to release stocks due to low prices, traders said.

Growers now target to sell more if prices are above 35 million dong ($1,552) a ton, deputy director Huynh Quoc Thich of Daklak's agriculture department told an industry conference earlier this month.

Robusta stood at 32.8-33.5 million dong a ton on Tuesday in Daklak, widening from 33.1-33.5 million dong a week ago.

ICE March robusta contract settled down 0.3 percent at $1,508 per ton on Monday.

Premiums of Vietnam's robusta grade 2, 5 percent black and broken also widened to $40-$50 a ton to the March contract this week from premiums of $20-$40 last Tuesday.

Vietnam's 2015/2016 coffee output is forecast at 29.3 million bags, the U.S. Department ofAgriculture said in a December report, having revised up from 28.6 million bags in its June estimate and also up from 27.4 million bags in the previous season.

Coffee exports in the first half of December jumped 17 percent from a year ago to nearly 64,000 tons, based on Vietnam Customs' data.

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The government will release full-month data next week.

Vietnam could export 26.67 million bags in the 2015/2016 crop year ending next September, up 31 percent from a year ago, based on the USDA data.

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