HANOI - Vietnamese coffee prices dropped around 2 percent on Friday following a fall in London robusta futures and the failure of an industry meeting to kickstart a plan to stockpile a fifth of the country's crop, traders said.
The price of robusta beans in Vietnam's top growing province of Daklak fell 2.2 percent to VND22,700 per kg from VND23,200 on Thursday.
London May robusta coffee ended $35 a ton lower at $1,249, under pressure from ample supplies, a strong dollar and overall weakness in soft commodities.
"It's quiet, with nobody selling or buying," a trader in Ho Chi Minh City said.
Farmers have been holding back beans in the hope that further gains were possible after prices picked up a little from recent lows.
Vietnamese coffee industry officials said they met in Hanoi on Thursday to discuss details of a plan to stockpile 200,000 tons of beans to support the market.
A lack of concrete action after the meeting contributed to Friday's price fall, traders said.
The plan, which requires at least $238 million in funding based on Friday's domestic market price, needs government approval before banks can extend loans.
Exporters had expected they could get cheap loans for their purchases, but the central bank wants to slow credit growth this year to 25 percent to control inflation, from 38 percent in 2009, and that may complicate the process.
"The stockpiling plan got government approval and won support from the central bank and the Finance Ministry, but Vicofa will need to make a list of companies to be assigned to stockpile beans," an industry official said, referring to the Vietnam Coffee and Cocoa Association, an industry body.
"The prime minister needs to sign off on the list before the purchases can start," said the industry official, who declined to be identified by name.
Vietnam exported an estimated 522,600 tons, or 8.71 million 60-kg bags, of coffee between October 2009 and last month, the first five months of the 2009/2010 crop year, a drop of 2.4 percent from the same period a year earlier.
The government statistics suggested there were around 8 million bags left in the country, excluding 1 million for domestic consumption, as a Reuters poll in January showed a median crop output forecast of 18 million bags.
The rough estimate of 8 million bags includes exporters' stocks, part of which may have been sold although loading may not have started. Another part is held by foreign buyers as well as by growers in the Central Highlands coffee belt.
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