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Vietnam Coffee Crop May Drop on Smaller Beans, Executives Say

Dec. 31 (Bloomberg) -- The coffee crop in Vietnam may be reduced in 2010-2011 after dry weather during the growing season cut the size of beans in the world’s biggest producer of the robusta variety, said three industry executives.

“The percentage of small beans this year is higher than last year,” said Hoang Van Long, head of Thai Hoa Buon Ma Thuot Co, a unit of Thai Hoa Production & Trading Corp., the country’s third-biggest coffee exporter. “It’s about 55 to 60 percent this crop, compared with 40 to 45 percent in the last crop.”

Robusta coffee futures rose to a more than two-year high yesterday on speculation that late rains, which followed a dry summer, delayed the Vietnamese harvest, curbing exports. Production may fall 15 percent to 1 million metric tons due to unfavorable weather, the state-owned Thoi Bao Kinh Te Vietnam newspaper reported this week, citing the ministry of agriculture and development information.

“During the coffee season we didn’t have enough water for the coffee, that is why the bean is smaller than in the last crop,” Luong Van Tu, chairman of the Vietnam Coffee & Cocoa Association, known as Vicofa, said in a telephone interview.

Rain delayed the start of the harvest by about a month. Harvesting should have started at the beginning of November, Nguyen Van Sinh, deputy head of the agricultural department in Daklak said Nov. 3. It only got underway towards the end of the month, local traders told Bloomberg at the time. Picking and drying were further disrupted by sporadic rains entering December, local traders and officials said.

Across the entire Central Highlands, Vietnam’s main coffee growing area, between 70 percent to 80 percent of the crop has been harvested, said Thai Hoa Buon Ma Thuot Co’s Hoang Van Long.

Spoiled Beans

“The volume of black beans will probably be larger this year as well, due to some rains at the start of the harvesting period that hindered farmers from timely drying the picked beans,” Long said. Black beans are of low quality and don’t meet international standards. Most are discarded.

Robusta-coffee futures in London have risen 61 percent this year, and advanced to $2,152 a ton yesterday, the highest level since September 2008.

“Total output will drop for this crop since the size of coffee beans is smaller than in previous crops,” Cao Van Tu, director of Ea Pok Coffee Co., a grower and exporter in Dak Lak province, said. The harvest in Dak Lak, Vietnam’s biggest coffee growing province, was around 80 percent completed, he said.

‘Early Days’

Still, product quality may improve as more shipments come to market. A rush to pick coffee beans following the weather delays might be responsible for lower quality among the first batches of beans to emerge from the harvest, Herve Touraine, executive director of Hong Kong-based trading company SW Commodities Ltd., said by telephone.

“It’s limited to the early shipments. Every year it’s the same: they try to rush out the coffee, so they harvest even green beans,” he said. “The more you wait, the better the ripeness and, of course, bigger beans and higher quality.”

Vietnam’s coffee shipments totaled 1.17 million tons in 2010, a 0.9 percent decline from 2009, according to preliminary figures from the Hanoi-based General Statistics Office on Dec. 28. On a monthly basis, export volume reached 130,000 tons this month, compared with 69,000 tons in November, and 145,000 tons in December 2009, according to the office’s figures.

To contact the reporters on this story: Nicholas Heath in Hanoi at nheath2@bloomberg.net Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net.

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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