Hanoi, Oct 22 - Vietnamese coffee exporter Intimex has concluded landmark deals to sell nearly a fifth of this year's harvest to global traders Armajaro and Louis Dreyfus, trade and company officials said on Thursday.
The unusually large supply deals from the world's top robusta producer may suggest stronger demand from traders eager to lock in supply for coffee, which has lagged far behind the surge in fellow soft commodities cocoa and sugar.
Intimex, which will catapult itself to Vietnam's top exporter spot with the deals, will sell 200,000 tonnes of the country's 2009/2010 harvest to the trading firms, helping it finance purchases from farmers.
The deals, which lock up around 18 percent of the harvest, are unusual in that typically sales happen in small quantities of 3,000 to 5,000 tonnes.
Foreign trading houses cannot buy direct from farmers, but have to go through a local firm.
The harvest peaks next month in a coffee year that runs from October to September, and is expected to bring in around 19 million bags, or 1.14 million tonnes of robusta coffee.
Under a memorandum of understanding signed with Armajaro, an 11-year-old physical commodity trading house headquartered in London, Intimex is committed to sell 100,000 tonnes of coffee between this month and September 2010, according to an Intimex source familiar with the deal.
PRICES TO BE FIXED LATER
"Prices of each contract will be fixed later," said the source, who declined to be identified as he was not authorised to speak to the media.
Armajaro later confirmed its purchase.
"Armajaro Trading signed a memorandum of understanding on Monday with Intimex to buy 100,000 tonnes of robusta coffee in the forthcoming 2009/10 season," Armajaro told Reuters.
Intimex also signed a contract this week to sell 100,000 tonnes of 2009/2010 crop coffee to Louis Dreyfus, trade and company sources said. One trader at an European firm said the total contract value was $140 million.
The two deals could have doubled the volume Vietnam has sold so far for the new crop year to 400,000 tonnes, according to traders' estimates.
They would also catapult Intimex to the top of Vietnam's coffee sales league. Vinacafe Buon Ma Thuot, the largest coffee exporter, shipped 180,000 tonnes of beans in calendar year 2008.
London coffee futures, which are down 5 percent so far this year, has been outstripped by an 86 percent gain for sugar and 23 jump in cocoa over the same year.
A trader in Ho Chi Minh City said Intimex had already signed a contract to sell 3,000 tonnes to Armajaro as part of the 100,000 tonnes covered by the memorandum. He gave no further details.
The Intimex memorandum was signed during a visit to Britain by Vietnamese Deputy Prime Minister Hoang Trung Hai, the Intimex source said.