Vietnam Coffee-Prices up, stock down, buyers away

HANOI, Aug 24 (Reuters) - Coffee prices rose in Vietnam in line with higher world prices and after a 2-percent devaluation of the domestic currency against the dollar, but slow demand kept deals limited, traders said on Tuesday.

A kg of robusta beans rose to 30,200-30,500 dong ($1.55-$1.57) in the top coffee growing province of Daklak on Tuesday, from around 30,000 dong a week ago, with domestic agents seen selling to exporters to take profit, traders said.

Domestic prices closely tracked London robusta futures market, where the November contract LRCc2 settled $14 lower at $1,777 per tonne on Monday [ID:nLDE67M1OK] but which was still $7 a tonne above the closing price a week ago.

"Farmers no longer have stocks for sale, only buying agents are selling now," a trader with a foreign company in Ho Chi Minh City said.

Discounts to the November contract widened this week to $100-$145 a tonne for shipment in September or October, from $130-$140 a tonne early last week, but foreign buyers have been absent, traders said.

Offers for next crop's beans stood at a discount of $100 a tonne, but trading was not active as market players wanted to wait for more clues from the harvest due to start in October.

"(Foreign) trading firms have also run out of funds so they could not buy much now," another trader in Ho Chi Minh City said.

While coffee prices quoted in dollar were higher this week, traders said the 2-percent devaluation of the dong against the dollar last week also made Vietnamese coffee more attractive.

Last Wednesday the State Bank of Vietnam cut the official rate to 18,932 dong per dollar, from 18,544 dong previously to help control the country's trade deficit. [ID:nSGE67G0F6]

Traders said after the devaluation exporters even quoted robusta beans grade 2, 5 percent black and broken at a discount of $150 a tonne to November contract last Friday.

Going by Tuesday's quotations, the beans used mainly for making instant coffee were priced at $1,632-$1,680 a tonne, free-on-board basis, against $1,630-$1,670 last Tuesday. <COFFEE/ASIA1>

Vietnam's coffee exports in August jumped 57.4 percent from the same month last year to an estimated 85,000 tonnes, or 1.42 million bags, the government said on Tuesday. [ID:nHAN219422]

Harvesting of the next 2010/2011 crop is due to start in late October in the Central Highlands coffee belt.

Heavy rains may start striking the region late this month or in September as an impact of La Nina, a state forecaster in Buon Ma Thuot, the capital of Daklak province, said.

Heavy rains in September could be critical to the country's coffee output as premature cherries may drop, leading to losses before harvesting starts in late October.

"But the rainy season is forecast to end in late October as usual," bringing no disruption to the harvesting process that peaks from late November, the forecaster said. ($1=19,470 dong) (Editing by Ed Lane)