Coffee sales curbed by growers in Vietnam as harvest declines An employee prepares a coffee inside a Trung Nguyen Corp. coffee store in Hanoi. Photo credit: Bloomberg Coffee farmers in Vietnam, the world’s top supplier of robusta beans used by Nestle SA, are restricting sales before the Lunar New Year holiday to secure higher prices from a smaller harvest. Growers probably sold 29 percent of the crop by end- January, compared with 36 percent a year earlier and a five-year average of 40 percent, according to the median of 12 trader estimates compiled by Bloomberg last week. Output in the 12 months started Oct. 1 will drop 7 percent to 1.6 million metric tons from a record the previous year, the survey shows. Smaller crops in Vietnam, Brazil and Indonesia may push up London futures by 20 percent to $2,300 a ton in the second quarter, a level last seen in 2011, according to Rabobank International. Brazil is the top grower of arabica and ranks second for robusta followed by Indonesia. Exports from Vietnam in January were the least for the month in three years. “Farmers are very persistent in holding back sales because they expect prices to rise after Tet,” said Phan Hung Anh, deputy director of Dak Lak-based Anh Minh Co., referring to the Feb. 16-23 holiday. “They’re better supported by banks, which are offering more access to loans and lower interest rates.” Anh Minh is the largest private exporter by volume. The central bank seeks to cut medium- and long-term commercial lending rates by as much as 1.5 percentage point this year, it said Jan. 28 on its website. The country is set to grow more than 6 percent this year for first time since 2011 as investment and lending expand and inflation slows. Brazilian exports Robusta settled at $1,922 on ICE Futures Europe on Feb. 5, rising 0.3 percent this year after a 14 percent increase in 2014. Arabica ended at $1.6475 a pound in New York, 1.1 percent lower this year after a jump of about 50 percent in 2014. Coffee prices were under downward pressure in the past three months partly because a weaker Brazilian real boosted exports, Rabobank said in a report e-mailed Jan. 22. “Destocking in Brazil cannot go on forever, and at some point beyond January, exports will have to come down,” Rabobank said. The bank said in December global coffee demand will exceed supply by 5.1 million 60-kilogram bags in 2014-2015. Vietnam probably shipped 120,000 tons in January, the General Statistics Office said on Jan. 27. That’s 16 percent below a year earlier and the smallest for the month since 2012, government data show. Water levels Average water levels in rivers and streams in Dak Lak in the last 11 days of January were as much as 0.3 meter lower than a year earlier, said the Meteorology and Hydrology Department. The region supplies about 30 percent of the harvest. Farmers are gathering a smaller crop in Vietnam, with trees yielding fewer cherries than the previous year when production reached an all-time high of 1.72 million tons. The latest median estimate for the harvest is 1.2 percent below the 1.62 million tons in a Bloomberg survey published on Jan. 9. Growers sold 460,000 tons by the end of January, compared with 620,000 tons a year earlier. Some traders expect even lower production. There’s “a growing consensus that the 2014-15 crop is falling substantially behind expectations,” Tong Teik Pte, a company owned by RCMA Commodities Asia Pte, said Feb. 4. The crop will drop by three million bags or more from a year earlier “due to very disappointing yields,” it said. Bloomberg