Bloomberg News

Lower Vietnam Robusta Sales May Lift Brazil’s Prices, Cepea Says

January 26, 2012

Jan. 26 (Bloomberg) -- Robusta coffee prices in Brazil, the world’s second-largest producer of the variety after Vietnam, may get a boost this year as farmers in the Asian nation slow sales, according to Cepea, a University of Sao Paulo research group.

Coffee exports from Vietnam may drop to 1.1 million metric tons in 2012 from 1.22 million tons estimated for last year, the country’s agriculture ministry has said. Officially, the crop in the season started Oct. 1 has been estimated at 18.5 million bags, down from 19.467 million a year earlier, according to the International Coffee Organization.

A bag weighs 60 kilograms, or 132 pounds.

Prices for robusta beans in Brazil tend to fall by April, when the harvest starts in Espirito Santo state, the leading producer of those beans in the South American country, Cepea said in a report today.

This year, even with an expected increase of the Brazilian crop, the price may not reach low levels, analysts at Cepea wrote in a report today.

In addition to lower production volume and rising domestic consumption, Vietnamese farmers and exporters have limited sales, waiting for better prices, Cepea said.

“This posture has boosted international prices,” the researchers said.

Before today, robusta coffee futures climbed 7.1 percent since Jan. 9 on London’s NYSE Liffe.

--Editors: Thomas Galatola, Bob Brennan

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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