Vietnam Coffee exports projected to decline in 2012

By Xua n Huong

VietNam News

November, 07 2011

Farmers harvest coffee in Nghia Hung Commune, 

Chu Pa District, Gia Lai Province. Coffee exports 

of the 2011-12 crop are expected to fall 

to 1.1 million tonnes. —VNA/VNS Photo Sy Huynh

HCM CITY — Coffee exports are expected to drop for the 2011-12 crop to 1.1 million tonnes of coffee, due to a fall in output and depleted stock, according to the Viet Nam Coffee and Cocoa Association (Vicofa).

"Viet Nam's 2011-12 coffee crop may have an output of 1.1 million tonnes, a reduction of nearly 200,000 tonnes over the 2009-10 crop due to the impact of unfavourable weather," said Vicofa deputy chairman, Nguyen Nam Hai.

The coffee harvest in Viet Nam, the world's second-largest producer after Brazil, runs from October to September.

World coffee production is expected to be at 129.5 million tonnes in the 2011-12 crop year, a reduction of 3.1 per cent over the previous crop.

However, consumption was projected to continue to increase at an annual rate of 2.5 per cent, Hai said, speaking at a meeting in HCM City last Saturday to review the 2010-11 coffee crop and set tasks for the next crop.

As of April, the country had 555,065ha under coffee cultivation, 94 per cent of which were household farms.

Hai said that farmers and enterprises had been applying more modern planting techniques in an effort to develop the industry in a sustainable manner.

The country exported 1.28 million tonnes for the 2010-11 crop, earning nearly US$2.7 billion, up 7 per cent in volume and 56 per cent in value over the previous crop.

Viet Nam's exports account for 18-19 per cent of the world's total exports, especially Robusta beans, which account for 60 per cent of the world's total.

Vietnamese coffee is exported to nearly 80 countries and territories, with the US, Germany and Belgium the largest importers.

World coffee prices increased strongly last year, from $1,300 per tonne in June 2010, to a peak of $2,500 per tonne in May this year in the London market.

This led to a two-fold rise in local price in the same period.

But prices began to fall in September to around $1,900 currently.

High coffee prices in the past have prompted farmers to rush to plant the tree without suitable land for cultivation.

These practices, coupled with excessive soil exploitation which causes a lower yield and quality, threaten sustainable development for the sector.

In addition, the practice of harvesting unripe coffee beans among farmers has led to an inconsistent quality of Vietnamese coffee.

Moreover, with 25-30 per cent or 137,000ha in old-growth coffee trees, coffee yield and quality are unstable.

To help the sector develop in a sustainable manner, Vicofa chairman Luong Van Tu said coffee growers and businesses should further unite in farming, processing and price setting.

Market forecasting and analysing of market information must be improved, he said.

Nguyen Van Hoa, deputy head of the Cultivation Department, said the coffee industry should reorganise production with a focus on improving quality, and investing more in processing to add more value to the bean.

The coffee sector in the coming years must replace old trees to avoid a sharp decrease in yield, he said.

In addition, coffee production companies should try to obtain global coffee certificates such as UTZ and Common Code for the Coffee Community to increase the value of Vietnamese coffee.

Hai said Vicofa would hold more trade promotion activities to boost exports to China, ASEAN member countries and the Middle East.

The association plans to stockpile 400,000 tonnes of coffee sor between six and nine months to prevent prices from falling, Tu said.

At the meeting, Agribank, Viet Nam's largest lender, and Vicofa signed a co-operation agreement, in which Agribank would lend the coffee sector VND5 trillion ($237.9 million) for producing, processing and stockpiling coffee.