HANOI, Vietnam – Vietnam will harvest a record 29.2m bags of beans in 2014/15, the US Department of Agriculture’s Hanoi bureau said in the Coffee Annual GAIN Report released yesterday by USDA.
Vietnam’s coffee cultivated area continues to expand in major coffee growing areas, despite the Government of Vietnam (GOV)’s recommendation to maintain at 500,000 ha of coffee area in Vietnam.
The Ministry of Agriculture and Rural Development (MARD), Provincial Departments of Agriculture and Rural Development, and the local coffee industry estimate Vietnam’s total coffee area at 653 thousand hectare (tha) in 2014, about 2 percent rise from 633 tha in 2013.
Actual coffee area likely exceeds 660 tha. Vietnam’s coffee production has tracked the increase in area, steadily increasing over the past three marketing years.
In addition to the increase in area, favorable weather conditions; better investment from farmers, including proper cultivation techniques, irrigation practices, and better fertilizer application; the usage of high yielding and rust resistant varieties; and stable farm-gate and export prices, creating a strong incentive for coffee growers to expand area and replace aging trees.
Post’s initial forecast of MY2014/15 production is 29.2 million bags, or 1.75 MMT, a slight increase from the previous MY. Post’s initial total export forecast for MY2014/15 is 28 million bags, or 1.68 MMT GBE, about an 8 percent increase over the previous year due to high exportable supplies, forecast high international prices at the start of the MY, and the continued development of the soluble coffee industry in Vietnam. Post maintains its estimate of coffee production for MY 2013/14 at 29 million bags or 1.74 MMT. The total export estimate for MY2013/14 is raised slightly to 25.9 million bags, or 1.56 MMT GBE due to greater exportable volume and larger than anticipated soluble coffee exports.
Given the strong growth of domestic coffee consumption supported by local producers’, the Vietnamese coffee industry association, and traders’, Post maintains its estimate of MY 2013/14 domestic consumption is 2 million bags, or 120 thousand metric tons (TMT) GBE. Post’s initial forecast for MY2014/15 domestic consumption is 2.08 million bags, or 125 TMT GBE with a growth rate of about 4 percent. Trade
According to data from MARD, Global Trade Atlas (GTA), and local traders, Vietnam exported 14.5 million bags, or 870 TMT of green coffee in the first seven months of MY 2013/14, a drop of about 5.6 percent from the previous MY.
Low export prices during the first three months of the MY is the main reason for this year-on-year decline. Export volume has increased significantly since February as farmers began to sell their crops when export prices increased.
Beginning in April 2014, the government began strictly enforcing truck weight limits for cross provincial movements citing the deterioration of roadways caused by overloaded trucks.
As a result, transportation costs from Central Highlands mills to the HCMC ports and warehouses reportedly tripled and truck availability also became an issue.
This may affect farm gate coffee prices and exports during the April and May months as upcountry traders and exporters get used to the new transportation situation.
However, local exporters forecast export pace through the rest of MY2013/14 will be strong, bolstered by high world prices, and Vietnam should surpass the MY2012/13 green coffee export levels.
Post maintains the MY 2013/14 estimate of total green coffee bean export at 25.9 million bags, or 1.56 MMT GBE, due to the increase in exports of processed coffee products, especially of instant coffee products and the anticipated pace of green coffee exports during the last five months of the MY.
In the first seven months of MY 2013/14, Vietnam exported coffee beans to 70 countries worldwide. The top fourteen markets accounted for about 80 percent of total green coffee bean exports. Germany replaced the United States as the largest importer of Vietnamese green coffee beans, with the United States dropping to the second largest market.
