Robusta coffee prices, which eased again on Monday, face continued pressure – for now - thanks to the prospect of harvest time in
top-ranked producer Vietnam, Commerzbank said.
Robusta coffee futures extended their losses to some 5% in
three sessions, after data showing inventories of the bean held by warehouses
monitored by the London exchange edging higher to 130,280 tonnes as of the
start of the month, turning against long-running downward trend.
And ideas of looser supplies look set to gain ground as Vietnam
builds up to harvest next month.
"Space has to be created in the largest robusta cultivation
country for the new harvest," Commerzbank said.
"Old stocks are thus being sold off at reduced prices."
'Pressure to liquidate
Indeed, coffee trader Volcafe, part of the ED&F Man,
revealed on Friday that Vietnamese coffee for shipment in October and November
had had opened up a discount of $30 a tonne to London futures, compared with
$20 a tonne the week before.
The value of Vietnamese cash prices was "coming down both
for the present as well as new crop", Volcafe, based in Switzerland, said.
"Pressure to liquidate current stock is increasing."
However, robusta values may gain support further ahead given
the prospects of this year's Vietnamese harvest, falling short of last season's
bumper crop, Commerzbank said.
"Overly high rainfall could result in the volume from the
forthcoming harvest, the level of which is likely to be delayed until November,
being 15% lower than last year's record level," the bank said.
"This should support prices in the medium term."
The International Coffee Organization last week upgraded its
estimate of Vietnam's 2011-12 coffee harvest to 22.5m bags, although other
analysts believe the crop was even bigger.
Volcafe pegged the crop at 27m bags, forecasting a harvest
of 26m bags for 2012-13, while CoffeeNetwork
has pegged the last crop at 26.5m bags and the forthcoming one at 24m
Commerzbank was more ambivalent on prices of arabica beans,
flagging the improved output in Colombia, where production rose 13.1% year on
year to 519,000 bags in September.
However, it warned that rains which have refreshed the early
stages of Brazil's 2013 crop may relieve trees "only temporarily" from dry weather
which has provided a less-than-ideal follow-on to a good flowering period.
Brazil's National Coffee Council flagged "good opportunities
for producers to make some sales" if rains do not return this week.
Robusta coffee for November closed down 1.5% at $2,064 a tonne in London on Monday.
In New York, arabica coffee for December delivery, ended 0.1% higher at 169.10 cents a pound.