"There are rains, but not as bad as some people described and actually in some areas it's pretty dry for the beans during the harvesting," said one trader who just returned from Vietnam.

"Farmers are happy. Local prices are much better than last year. Now they've all got motorbikes and colour televisions. It's good harvesting there," said the trader.

However, the size of the beans was still a concern.

"The quality is not so bad but the beans are indeed smaller. It's not good for roasting," said another trader.

Some buyers were waiting to see whether the size of the beans would improve later, the trader said.

The market was not yet active also because some Western houses had covered their positions and Vietnamese farmers were not eager to sell, hoping prices would rise further along with world prices, traderssaid.

Western traders see a bullish picture for world prices over the next few weeks amid activities of Hurricane Mitch in and around Central America.

"The farmers (in Vietnam) want to sell slowly. When London prices surge, you will see a bit of trade. If not, they will be just comfortably waiting," the first trader said.

The Vietnam Coffee and Cocoa Association (Vicofa) has forecast the country would produce 340,000-360,000 tonnes from the current crop.

Vietnam's robusta grade 2, 5.0 per cent black and broken was quoted at around $220/$240 under London levels.

Vietnam's harvesting of the 1998/99 crop started in late October and is expected to peak in mid-November and last until January and February.

Vietnam and Indonesia are the two main coffee producers and exporters in Asia.

In Indonesia, now in its off season, the rupiah movements remained the main concern for the trade.

Farmers in Indonesia are still holding onto their beans as profits have been cut by the strengthening of the Indonesianrupiah.

"The rupiah weakened a little these days, but it's still considered relatively strong by the farmers," said one trader.

Indonesia's next harvest is expected to start in March.

"The weather in Indonesia looks good. If the weather doesn't change pattern until December and mid-January, we'll also see a good crop from Indonesia next year," said the trader.

Indonesian beans were seen by the trade at between $200/$220 under London.