HANOI: Coffee production in Việt Nam could drop up to 7 per cent in 2016 and 2017, to 27.3 million bags over the previous crop, due to adverse weather conditions. A report published on the website of the United States Department of Agriculture (USDA)’s Foreign Agricultural Service early this month even forecast a 15 per cent decline in coffee production in case the drought is prolonged and followed by unfavourable rains caused by La Nina.
“There is concern about the severity and impact of dry weather on the conditions of the coffee crop in key producing provinces in the Central Highlands of Việt Nam, namely Đắk Lắk, Đắk Nông, Gia Lai, and Lâm Đồng,” the report said, and added that El Nino, which began in 2015 and continued into 2016, was the hottest on record.
There was less rain, lower water levels, higher temperatures, and less humidity across the Central Highlands. Although the first rains of moderate intensity occurred over the region in the week ending April and beginning of May and provided water and improved soil moisture significantly for coffee trees, the weather was still hot as rainfall during these months was much lower than previous years, according to the USDA. June coffee crops were anticipated to face additional losses due to lack of rains, the USDA wrote.
The USDA noted that the high probability of La Nina between August and October would bring a lot of rain to coffee-growing areas, but the timing of the rains might not be useful for the coffee growing cycle. If La Nina materialised in the second half of 2016 and affected the region, the reduction could be greater than the 7 per cent drop. The coffee-growing area of Việt Nam was estimated at more than 660,000ha.
Domestic Robusta prices bottomed out between February and March, and have rebounded steadily in the past two months due the news of the unfavourable harvest in Brazil and the drought situation in parts of Việt Nam. They are currently between VNĐ36,000 and VNĐ37,000 (US$1.5) per kg.
