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Poor conditions take their toll on domestic coffee production

Update: December, 06/2014 - 10:11

Viet Nam has 622,167ha under coffee, with 126,000ha having old trees with low yields and unreliable quality. — Photo tuoitre.vn

HCM CITY (VNS)— The 2014-15 coffee crop will see output fall by 20-25 per cent due to drought and a large proportion of old trees with low yields, according to the Viet Nam Coffee and Cocoa Association.

The last crop (from October last year to September this year) too had been seriously affected – by drought and diseases — but an increase in the area under coffee meant output had risen a bit, Nguyen Nam Hai, the association's deputy chairman, told a review conference in HCM City yesterday.

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.

Tran Viet Hung, deputy head of the Central Highlands Steering Committee, said the replanting programme was launched a few years ago but its progress does not match the sector's expectations.

According to the International Coffee Organisation, global production could fall short of demand by 800,000 bags (60kg each) next season, the association said.

Exports strong

From the 2013-14 crop Viet Nam exported 1.66 million tonnes of coffee for US$3.4 billion, an increase of 17.2 per cent in volume and 12.5 per cent in value, Hai said.

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

Luong Van Tu, the association's chairman, said raw coffee accounted for 90 per cent of the exports. Companies also exported three-in-one, two-in-one, and roasted coffee, but in limited quantities, he said.

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 per cent of the total by 2020.

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

The ASEAN Economic Community will come into existence next year, creating a single market out of the 10 countries in the block.

Companies in the region would then invest in Viet Nam's coffee industry, creating a challenge for domestic firms, he warned, adding the latter should therefore focus on improving their competitiveness.

The association expects exports in 2014-15 to be only around 1.4 million tonnes. — VNS

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