By Ho Binh Minh
HANOI, Feb 14 (Reuters) - Vietnamese farmers are holding low stocks of coffee now while adverse weather could affect production of their next 2011/2012 crop, a senior industry official said on Monday.
But robusta export from the world's top producer of the variety now being increasingly bought due to a surge in arabica prices, would not fall even though some foreign firms were found to be making illegal purchase in Vietnam, said Luong Van Tu, Chairman of the Vietnam Coffee and Cocoa Association (Vicofa).
Initial reports from the Central Highlands coffee belt said some cherries did not contain solid beans inside, suggesting the 2011/2012 crop may not get good output, he said in the first remark of the next crop.
"The recent slow loading pace is due to a lower-than-forecast volume of coffee now held by farmers," Tu said, adding that slow sales by Vietnamese farmers who can get mortgage-free loans from the government also contributed to slower exports.
Loading could ease to between 80,000 and 90,000 tonnes this month from January's 140,000 tonnes as more delays due to high domestic prices emerge, traders have said. Domestic coffee prices in Vietnam have so far this year risen more than 9 percent from the end of 2010 to around $1,940 a tonne, on top of an annual surge last year of 56 percent.
Tu said he has not had any final output number for the 2010/2011 harvest that ended in late December, as the association was still comparing crop data from its member companies.
The association said in December 2010 that the output may drop 10 percent from 17.5 million bags estimated earlier due to problems with smaller beans.
But in contrast, the January report of the International Coffee Organization (ICO) said Vietnam's 2010/2011 coffee output has risen 1.3 percent from the previous crop to 18.43 million bags.
The London-based ICO releases global coffee export data from contributions by members, while the output data come from other sources, Tu said.
Vietnam's coffee crop year lasts between October and September, starting with a harvest that peaks in late November or early December.
LOCAL BUYING NETWORKS
Some foreign companies which have been exporting coffee from Vietnam have been found to be organising their local buying network in the country, something not allowed by the law, Tu said, citing reports from Vietnamese exporters.
The association has advised businesses and provincial authorities that foreign firms have the right to buy and export Vietnamese coffee but that the right excludes "organising networks to buy goods in Vietnam for export", it said in a statement on Monday.
The coffee export volume from Vietnam will not drop after this move because most foreign companies have been buying coffee mainly via Vietnamese exporters, Tu said.
The latest findings may prompt provincial authorities or the trade ministry to punish any violators by suspending the operation of their representative office in Vietnam.
Source: (Editing by Ramthan Hussain) ((ho.minh@thomsonreuters.com; +844 3825 9623; Reuters Messaging: ho.minh.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
