HANOI - Vietnam, the world's second largest coffee exporter, will likely see output drop by 20 per cent next year as bad weather and old trees undermine production, growers said.
Coffee farmers expect to produce about 1.3 million tonnes of beans during the year starting in October, down from 1.6 million tonnes grown during the last 12 months, the Viet Nam Coffee and Cocoa Association (Vicofa) said.
A long-lasting severe drought in the Central Highland provinces of Dak Lak, Lam Dong, Dak Nong and Gia Lai, where most Vietnamese coffee is grown, has hurt production. In Dak Lak alone, nearly 48,000 ha of coffee plants suffered from water shortages, resulting in a decrease of 15 per cent to 20 per cent in the output compared to those of the previous harvest.
Another reason for the drop in coffee production has been low efficiency due to ageing coffee trees and a slow progress in replanting coffee trees.
Vicofa estimates that more than 120,000 ha of ageing coffee trees in the Central Highlands provinces need to be replanted by 2020. However, farmers and businesses in the region have not been able to replant coffee trees on a large area due to a lack of capital.
Some farmers are holding around 200,000 tonnes of bean harvested from the current crop year to wait for better prices, Vicofa said.
In the first eight months of the year, coffee shipments reached 874,000 tonnes for an export value of US$1.8 billion (S$2.5 billion), down 33 per cent in both volume and value against the same period last year, the country's General Statistics Office said.
Germany and the United States continued to be the two largest export markets for Vietnamese coffee, receiving 14.9 per cent and 11.3 per cent, respectively.
Viet Nam is currently home to 671,000 ha of coffee trees, making it one of the country's major crop earners. Last year, Viet Nam earn $3.6 billion from coffee exports.
Coffee output has also dropped in Brazil, the top coffee producing country in the world and Columbia, the third largest coffee producer, sparking a shortage of around 300,000 tonnes worldwide.