Vietnam 2011 coffee exports to dip to 1.15 mln T

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The estimate, released after an industry meeting, is below a forecast by the Agriculture Ministry last week, when it revised down the country's coffee export projection this year by nearly 5 percent to 1.2 million tonnes, or 20 million bags.

The Vietnam Coffee and Cocoa Association, or Vicofa, said most of the export volume would be robusta beans while arabica would reach around 40,000 tonnes, or nearly 670,000 60-kg bags.

Vietnam is the world's top producer of the bitter variety used mainly for making instant coffee. Its coffee crop year runs from October to September while the government uses the calendar year to December in its statistical system.

Vietnam produced 38,000 tonnes of catimor, a variety of arabica, in the current 2010/2011 crop, from 37,000 tonnes in the previous season, Thai Hoa Group Chief Executive Nguyen Van An said in January.

Vicofa will also seek government approval to fund export firms to stockpile between 200,000 and 300,000 tonnes of coffee at the start of the next 2011/2012 crop, it said in a statement.

Last December the agriculture ministry, at Vicofa's proposal, had sought government approval to stockpile between 300,000 tonnes and 500,000 tonnes of coffee to help reduce pressure on suppliers and support prices.

But the plan did not come through as prices in December were already about 75 percent above farmer production costs and exporters would need nearly $1.8 billion for their purchase.

On Tuesday robusta prices eased to 45,700-45,900 dong ($2.2) per kg in the Central Highlands coffee belt, from 46,500-46,600 dong a week ago and well below the record high of 52,000 dong reached on May 11.

But prices have soared nearly 55 percent from the same period in 2010.

Stocks have been thinning in Vietnam following strong exports thanks to good prices during the first half of 2011. Vicofa said loading volume between January and June jumped 32 percent to 761,000 tonnes, citing customs data.

Vietnam will begin its next 2011/2012 crop harvest in November.

Vicofa statement did not give any output forecasts, but said a quarter of Vietnam's coffee area are old trees which will provide lower yields.

A Reuters poll of 33 analysts around the world in July showed Vietnam could see its biggest harvest ever with a median estimate of 21 million bags, up from 18.5 million bags in 2010/11, and well above its 2006/07 record crop at 19.3 million bags, ICO data shows.

Coffee growers have also faced a jump of 20-30 percent in their production costs due to higher prices of fertiliser and diesel -- used for water pumps during the tree watering period -- as well as high loan interest rates, the statement said.

Vicofa said it would start collecting $2 from exporters for each tonne of their exported coffee as of Jan. 1, 2012 and use the proceeds to support coffee re-planting, trade promotion and also to finance the stockpiling scheme.