Vietnam’s coffee output forecast to drop 20 percent next year

The 2014-15 coffee crop will see output fall by 20 percent due to drought and a large proportion of old trees with low yields, according to Chairman of the Vietnam Coffee and Cocoa Association (Vicofa) Luong Van Tu.

Vietnam expects to export 1.4 million tonnes of coffee during 2014-2015, down 200,000 tonnes from the previous crop, Tu told a conference in Ho Chi Minh City on December 5 to review its 2013-2014 performance and set tasks for next year.

According to the General Department of Customs, Vietnam remains the second largest exporter of coffee, behind only Brazil , with 1.66 million tonnes shipped during the 2013-2014 crop for US$ 3.4 billion, up 17.2 percent in volume and 12.5 percent in value.

Germany was the biggest buyer, followed by the US, Spai, Belgium, Japan and Russia.

However, Tu said that raw coffee accounted for 90 percent of the exports. Companies also exported three-in-one, two-in-one, and roasted coffee, but in limited quantities.

Coffee prices were rather low after the last crop, requiring the industry to focus on improving quality and developing brands to earn higher export prices, he said.

The industry has set itself a target of increasing the output of instant and roasted coffee to account for 25 percent of the total by 2020.

Coffee consumption in the domestic market remains modest, at around 10 percent of the annual output, and more should be done to boost consumption, Tu said.

He warned that Vietnamese coffee exporters will face more severe competitions as the ASEAN Economic Community is to take shape next year and coffee prices are fluctuating due to harmful impacts of climate change.

Vicofa will ask the Ministry of Agriculture and Rural Development to buy in coffee for stockpiles in case its prices plummet, and partner with the Vietnam Food Administration to issue a set of Vietnam standards for roasted and instant coffee next year.

During the 2014-2015 crop, Vicofa will assist coffee farmers in re-cultivation and call for more business involvement in coffee processing, he added.

The country has 622,167ha under coffee, with 126,000ha having old trees with low yields and unreliable quality.

In the next five to 10 years, 140,000-160,000ha need to be replanted, the association said.

Source: VNA

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