Vietnam’s 09-10 #coffee output probably won’t fall much

26-08-2009

SINGAPORE – Vietnam’s coffee production for the 2009-10 crop year may not fall as much as an industry body forecast, industry participants said Wednesday.

“I think the market talk is about a 10% drop at most,” which means a total of at least 16 million to 17 million 60-kilogram bags, said an executive at an international agricultural commodities trading house in Vietnam.

The Vietnam Coffee and Cocoa Association said earlier this week that coffee output from the world’s second largest producer and Asia’s top exporter is expected to fall by 15%-20%. The association estimates output for the 2008-09 crop year at 16 million bags.

Unseasonable rains, aging trees and less use of fertilizers and chemicals were cited by the association’s chairman, Luong Van Tu, as major factors that will result in lower production for the next crop year starting Oct. 1.

The unseasonable rains at the flowering stage may have some impact on the final production, but it shouldn’t fall by so much, said the executive.

“I think people will pay more attention to the USDA report (on Vietnam’s coffee crop), which will be published in October,” he added.

Industry participants in Vietnam tend to be skeptical about the association’s figure, as it tends to give the lower side of the estimate range in the hope of boosting prices.

While some traders forecast slightly lower output, others also said it is likely that the final output will be able to largely match last year’s.

“I’d say ‘So far, so good.’ There’s no major weather or other problems that will lead to a smaller crop,” said an official with a commodities trading house in Ho Chi Minh City.

Production should remain near 20 million bags, said the official.

Vietnam is expected to begin harvesting the new crop in late October or early November.