Buon Ma Thuot, Sept 30 - Vietnam's 2008/2009 coffee season starting on Wednesday would produce up to 6.7 million bags, up 23 percent from the previous harvest in its top growing province of Daklak, a provincial official said.
Vietnam's coffee output, one-third of which comes from Daklak, has been forecast to rise 19 percent in the next season. This would pressure on global prices as the world deals with an expected coffee surplus and the widening impact of the U.S. financial crisis.
"While the overall planting area does not change much, yields from this crop are rising following favourable weather," Nguyen Van Xuan, deputy director of Daklak's Agriculture Department, told Reuters in an interview on Tuesday.
The harvest in Daklak would start from mid-October, two weeks earlier than usual, and its output would reach 380,000 tonnes to 400,000 tonnes (6.3-6.7 million bags), he said.
"Farmers would start picking early from the middle of October and fresh beans could be exported from late October," Xuan said.
Outside Buon Ma Thuot, Daklak's capital, coffee tree branches bent down under the weight of numerous green cherries on a sunny Tuesday, evidence of the intensive care farmers have taken following a price surge early this year even though production cost had also jumped.
Prices jumped 43 percent to 40,000 dong ($2.4) per kg in Daklak in March, from 27,900 dong in June 2007, while fertiliser prices rose an average 60 percent during the period, Xuan said but did not give any overall production cost.
Forecasts of Daklak's next crop year between this October and September 2009 are a revision from a previous provincial output estimate of between 6 and 6.17 million bags released in June.
Plentiful rains so far this year have been good for Vietnam's new coffee crop and output would rise to 21.5 million 60-kg bags, up from 18 million bags in the previous 2007/2008 crop, according to a Reuters poll in July.
Xuan said the average yield was expected to rise to 2 tonnes to 2.1 tonnes per hectare from Daklak's 178,000 hectares (440,000 acres) under plantation, similar to the 2006/07 crop's yield. Yields reached 1.87 tonne per hectare in the current 2007/08 crop.
Daklak's bumper crop and Vietnam's larger harvest would pressure world robusta prices as the world could face 3 million bags in surplus in the coming season, according to industry estimates.
World production for the 2008/09 crop would reach 131 million bags, the largest since the 2002/03 crop of 48.48 million bags and also up from 118.2 million bags in the 2007/08 season, the International Coffee Organization said in its August report.
ICO's preliminary estimates showed world consumption in calendar year 2007 was 124.7 million bags, up 2.93 percent from 2006. If current growth rates continue, world consumption could increase to around 128 million bags in 2008, the ICO said.
WEATHER WOES
A tropical storm, the seventh in Vietnam this year, was nearing Vietnam's central coast early on Tuesday but heavy rains already fell on Monday in the northern part of the Central Highlands coffee belt comprising five provinces.
Rains, which could delay the progress of the harvest and raise the moisture content causing defects in beans, are a factor to watch as Vietnam expects up to 10 storms each year.
Officials in Lam Dong and Gia Lai, the country's second- and third-largest coffee producers, said recent rains would not hit production while the harvest would start in November as usual.
Flash floods could also strike low-lying areas in the Central Highlands, but the well-preserved natural forests should keep Daklak's coffee safe, said Xuan, who has been dealing with forestry developments since 1981.
"Storms and tropical low pressure systems are abnormal weather changes this year, but overall the weather has been favourable for the coffee crop," he said.