Vietnam, the world's largest robusta producer, could unload more beans to the physical market this week on worries that London futures may fall further because of the prospect of a record global crop, dealers said on Monday.
World coffee production is projected to rise to all time high at 146 million (60-kg) bags in 2012/13, up 11 million bags from 2011/12, CoffeeNetwork analyst Andrea Thompson said on Friday.
"I am actually expecting (Vietnam) to sell. With this kind of news, people may start to be more alert and try to sell instead of holding on more," said Lynette Tan, an analyst with Phillip Futures in Singapore.
"When someone has kick started the selling, everyone else will start to panic."
Differentials for Vietnamese beans could widen this week if farmers and middlemen start to offer more coffee, which were quoted at discounts of up to $60 a ton to London's May contract last week.
Robusta prices have fallen more than 20 percent from peaks hit in March 2011, partly because of expectations of rising output in the crop year to September 2013, which eased concerns about tight supply.
The May robusta contract on Liffe fell $38 to end at $2,050 per ton on Friday after New York's May arabica futures dropped 3.20 cents or 1.7 percent to close at $1.862 a lb.
While Vietnamese beans are being sold at discounts to futures, Thai sugar premiums may hold near last week's levels of 100 points to New York's May contract as a dip in global prices could entice buying and help offset pressure from rising supply.
"Sugar for March-May delivery is at 90 to 100 points over the May contract," said a dealer in Bangkok, referring to the early indications of premiums offered at the physical market in Asia. "I would think crushing will last until the end of April."
About 71.96 million tons of cane have been crushed in Thailand since crushing started in November, producing 5.1 million tons of raw sugar and 2.2 million tons of whites, according to dealers' estimates.
Thailand, the world's second-largest sugar exporter after Brazil, is forecast to produce a record 9.9 million tons of sugar in the current 2011/12 crop and export 7.5 million tons in 2012.
Raw sugar prices on ICE turned lower on Friday with May down 0.30 cent, or 1.25 percent, to end at 23.66 cents a lb.
Tokyo rubber futures will track movements in the yen and oil this week, with the most active August contract supported at the 200-day moving average around 330 yen a kg.
The rubber market also keeps on eye on the progress of Thailand's plan to intervene in the domestic market to support prices.
In cocoa, butter prices are likely to be stuck in a range, with chocolate makers already well covered ahead of the Easter festival.