HANOI- Trade in Vietnam coffee has slowed ahead of an extended weekend as concerns over falling global coffee prices due to possible selling pressure in coming days prompted Vietnamese growers and sellers to hold back sales, traders said on Tuesday.
Vietnam, the world's top robusta producer, has completed more than two-thirds of its 2015/2016 coffee crop harvest, and ample supply of fresh cherries plus carryover stocks from the previous season have been pressuring coffee prices.
Robusta futures have been falling in line with lower crude oil prices, and on higher supplies from Vietnam's harvest and a weak currency in top producer Brazil in recent months. The ICE January robusta contract hit a two-year low on Nov. 30.
ICE March robusta contract, used for trading Vietnamese robustas since late November, was traded down $9 at $1,525 a tonne last Friday, after falling more than 3 percent so far in the 2015/16 season that began on Oct. 1.
"There are two more days left before people can roll over to the March contract or sell, so the fears are of a price collapse if selling emerges," said independent analyst Nguyen Quang Binh.
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Many traders are hesitating between fixing their selling price for January delivery, under which the volume is huge, and rolling over to the March contract, traders said.
Many growers and exporters have chosen to hold back sales, anticipating the London market reopens lower on Tuesday after closing the previous day for the Boxing Day holiday.
Robusta beans stood at 33.4-33.7 million dong a tonne ($1,485-$1,499) on Tuesday in Daklak, Vietnam's largest growing province, little changed from 33.4-33.8 million dong a week ago.
"The stock is high but much of it remains unsold," a trader at a foreign firm in Ho Chi Minh City said, citing buying agents in the Central Highlands coffee belt, which produces 80 percent of Vietnam's total coffee.
Vietnam's robusta grade 2, 5 percent black and broken were traded at premiums of $30-$35 a tonne to the March contract this week, narrowing from premiums of $40-$50 last Tuesday.
At the same time last year, the beans were offered at between par to London prices and a premium of $15/tonne.
Vietnam will export an estimated 1.28 million tonnes (21 million 60-kg bags) of coffee in calendar year 2015 ending this month, down 24.3 percent from last year, the government said last Saturday.
