Indonesia, Vietnam coffee output rising-Noble Group

20 | 11 | 2007

Robusta coffee production in Indonesia and Vietnam will continue to grow in the coming years, with Indonesia increasing its stocks next year, a senior coffee analyst said on Friday November 16.

Jens Nielsen of Hong Kong-based commodities firm Noble Group said farmers in both countries are taking better care of fields and planting new trees, which could increase their output.

"The production is close to 10 million bags," he told a coffee conference in Costa Rica. "It is likely to increase to 12 million bags over the next couple of years." That increase in production will help fuel a rise in stocks in Indonesia, which Nielsen said would rise from their current level of 35,000 tonnes to 175,000 tonnes in 12 months.

In Vietnam, he said farmers continue to plant new trees in areas shared with rice and vegetables, masking the full extent of production growth in official coffee statistics. "The expansion during the last couple of years has continued despite recommendations from the government not to grow more, the farmers haven't listened," he said. "I would not be surprised to see 25 million bags of production in the next couple of years." Because of global coffee price increases and currency revaluations, Vietnamese farmers are receiving triple the price they received three-years ago, Nielsen said. "No wonder that the Vietnamese are producing and keep producing as much as they can."

He also said that Laos, which currently produces 400,000 bags of coffee, could become another big producer if the country can find enough labour from neighbouring Vietnam to work in fields.

While some coffee traders worry rising production could surpass global demand and hurt prices, Nielsen said that consumption of coffee in tea-drinking Asia is growing. "There is no doubt that over time Asia is going to be a major consumer of coffee," Nielsen said. "It takes time to change habits from drinking tea to coffee, but it is happening," he added.

Source: Intellasia.net

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