Vietnam’s drought-hit coffee harvest will fall further than had been thought, to a four-year low – but prospects would have been worse not for late rains, which bode well for the 2017 crop.
US Department of Agriculture bureau in Hanoi cut to 26.6m bags their forecast for coffee output in the world’s second-ranked producing country in 2016-17 – a result which would represent a drop of some 2.3m tonnes, or 8.0%, year on year.
The downgrade, while taking the bureau’s forecast 660,000 bags below the USDA’s official estimate, was less gloomy than some other estimates, for a season marred by dryness blamed on the El Nino weather pattern.
Vicofa, the Vietnam coffee and cocoa association, has forecast a drop of 10-20% in output, an estimate backed by exporter Intimex, although BMI Research has forecast a 26.88m-bag crop.
However, the bureau flagged the impact of late rains in helping trees recover from “extremely harsh” conditions earlier in the year, which had “left many coffee trees weak and resulted in trees producing fewer cherries”.
“Adequate rains starting from August helped the coffee trees recover after a particularly harsh, dry period,” the bureau said.
“Nightly rains and good daytime sunshine were favourable conditions for coffee development and growth.”
The rains had also spurred applications of fertilizer, which require moisture to enter the plant, and which “helped farmers provide adequate nutrition not only necessary for normal coffee cherries development, but also for producing useful branches for 2017-18 production”.
Coffee flowers, and subsequent cherries, are borne on vegetation grown the previous season.
Beans vs corns
Still, the bureau flagged a potential setback yet to the revival in Vietnam’s coffee output, flagging a threat from growers replacing plantations with other crops.
“The economics of coffee production is changing in Vietnam.
“Farmers are changing from producing coffee to growing other cash crops… to generate higher incomes,” the bureau said, citing as alternatives avocados, passion fruit and, in particular, black pepper of which Vietnam is the top exporter.
“Farmers are earning higher income from growing black pepper. This situation is luring farmers to switch sizeable parts of their farms to growing pepper.
“The expansion could pose a threat to coffee production in the Central Highlands,” the key coffee-growing area, besides in Dak Lak, “where arable land is limited”.
The bureau pegged Vietnam’s coffee exports in 2016-17 at 25.1m bags – 2.1m bags below the USDA’s official forecast, and representing a tumble of more than 4.4m bags year on year.
It flagged “carry over stock and expected lower production”.
With Vietnam the top producer of robusta coffee, the country’s disappointing harvest has been a particular issue for buyers in this market, especially given poor crops of the variety in the likes of Brazil and Indonesia too.
Indeed, many buyers have sought supplies of lower-quality arabica beans as a replacement, spreading price strength into the arabica market, before the correction since mid-November.
(Source – http://www.agrimoney.com/news/late-rains-take-some-sting-from-vietnams-coffee-woes–10234.html)