Vietnams Feb coffee exports boil to 3-yr high with lower crop fcast in Brazil

The government estimates February shipments reached 130,000 tons, up 9 percent from the same month in 2016.

Vietnam exported an estimated 130,000 tons of coffee in February, a three-year high, the government said on Tuesday, as roasters built up stocks after top producer Brazil forecast a smaller harvest for the 2017/2018 season.

February's estimated shipments, equivalent to 2.17 million 60-kilogram bags, represent a rise of 9 percent from the same month last year, the government's General Statistics Office said in its monthly report, and were also up from the 97,000 tons shipped in February 2015.

The February volume brought the country's total coffee exports since October 2016 at the start of the current 2016/2017 crop year to 650,000 tons, up 2 percent from a year ago, based on government data. The crop year runs through September 2017.

The country's increased overseas coffee sales follow a global uptrend, under which the world's exports for the October-December period rose 8.3 percent from a year ago to 29.8 million bags, based on data from the London-based International Coffee Organization (ICO).

Conab, the Brazilian's crop supply agency, has forecast Brazil's output will fall around 10 percent to between 43.65 million and 47.5 million bags in the upcoming 2017/18 crop year, the ICO said in its January report released earlier this month.

"Large export volumes and the high levels of stocks in consuming countries seem likely to put pressure on price levels," the ICO report said.

Brazil is the world's largest coffee producer and exporter. It produced a record arabica coffee crop last year, while the output of its robusta, locally referred to as conilon, fell to the lowest since 2004 after two years of droughts in the main producing state Espirito Santo. 

The Brazilian government estimates current volumes at around 2 million bags, which processors say is not enough to cover even two months of demand, Reuters has reported.

On February 20, Brazil's Agriculture Ministry said it was seeking permission to import 1 million bags of robusta, with shipments likely to come from top producer Vietnam.

But two days later, Brazil's President Michel Temer suspended robusta coffee imports, pushing down the futures prices of the variety by more than 1 percent, or $28 a ton.

Robusta prices in Vietnam, which closely follow London's futures market, have also edged down after a brief pickup, easing around 1 percent to VND45,600 ($2.0) per kilogram in Dak Lak, the country's top coffee growing province, dealers in the province said.

However, Dak Lak prices have risen 28 percent so far in the current crop year. 

In January alone, robusta prices hit 108.32 U.S. cents/lb, the highest monthly level since September 2011, the ICO report said.

"This increase can mainly be attributed to supply shortages stemming from a small conilon crop in Brazil and reduced crop forecasts for Vietnam and Indonesia," it said.

Vietnam is projected to harvest 26.7 million bags in the 2016/17 season, down about 8 percent from the previous year due to dry conditions brought by the El Nino weather phenomenon, the U.S. Department  of Agriculture said in a report last December.

The USDA also forecast Indonesia’s 2016/2017 output will fall 21 percent to 10.0 million bags, citing severe drought in most of the growing regions.