Favourable weather conditions could see Vietnam produce 1.8 million tons of coffee this year, industry insiders have said.
Le Tien Hung, general director of Simexco Dak Lak, one of the country’s largest coffee exporters, told Bloomberg this would be a record.
He was very hopeful since Dak Lak Province, the nation’s coffee capital, has been blessed with lots of rain this year, he said.
Favorable rains and plantings of new high-yielding varieties in multiple farms in Vietnam’s “coffee capital” of Dak Lak helps explain the higher output, he said.
But some analysts were less sanguine about the bumper crop, saying since Vietnam is one of the world’s largest robusta producers, a record harvest would create a supply overhang and drag global prices down.
The Ministry of Agriculture and Rural Development had reported in June that coffee prices were decreasing in the Central Highlands, Vietnam’s largest coffee-producing region, which also produces much of the country’s black pepper, since the beginning of the year, and were unlikely to recover soon.
Robusta prices now stand at VND35,100–35,500 ($1.55-1.56) per kilogram, down VND400–600 since the end of last year and the lowest levels in the last two months.
Farmers were holding on to their stocks and not selling, the ministry had said.
The National Center for Hydro-Meteorological Forecasting has forecast normal rainfall in September in the Central Highlands, which will boost yields when coffee beans are harvested in November.
Vietnam exported nearly 1.2 million tons of coffee worth $2.2 billion in the first 7 months of this year, up 12.2 percent in volume, but down 4.5 percent in value, according to the General Statistics Office.
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