Vietnam's coffee race losing steam

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Tue Dec 7 10:32:38 PST 1999


Tuesday, November 30, 1999

Vietnam's coffee race losing steam -- Jakarta growers Lewa Pardomuan

Jakarta, Nov 29: Indonesian coffee growers are unnerved by a forecast surge in Vietnamese production, saying they are falling behind in the race to improve plantation yields. Though Indonesia is confident of retaining its position as the world's third-largest coffee producer this season, growers are looking over their shoulder at their biggest rival, Vietnam. A Reuters poll of traders in Vietnam showed on Monday the nation was expected to yield around 4,70,000 tonnes in the year to September 2000. The official forecast is for over 5,00,000 tonnes. Indonesian output is also expected to total around 4,70,000 tonnes in the 1999/00 growing year, an industry source said. ``We are confident of maintaining our position as the world's third-largest producer. Vietnam may say their production is higher but it is only an estimate,'' said one source at the Indonesian Coffee Association in Jakarta. But coffee-industry experts in Indonesia, which produces mostly robusta coffee and ranks after Brazil and Colombia interms of production, said there was cause for concern. ``Our plantation areas cover about one million hectares, while Vietnam's does not even reach 3,00,000 hectares... the thing about Vietnam is the country really pays attention to the agriculture sector,'' said the source. ``We are not worried this year because the weather will be good. There will be no La Nina or El Nino... but we can't deny the truth: Vietnam's productivity is increasing.'' The next harvests are expected to start in April in Sumatra, which is Indonesia's main coffee-growing area. Indonesian industry sources say Vietnam will easily overtake Indonesia's position if productivity is not improved in Sumatra and the other big coffee-growing islands of Java and Sulawesi. Official data shows Vietnam has 3,50,000 hectares planted with coffee. Of this, 3,00,000 hectares lie in the central highlands where average productivity is 1.2 tonnes of beans per hectare. Indonesian coffee officials say average productivity in Lampung on Sumatra - a keygrowing area - only reaches 650 kg of beans per hectare. The source said Indonesia's coffee production was expected to reach 4,70,000 tonnes in 1999/00, with carry-over stocks totalling 30,000 tonnes. Exports are forecast to total 3,60,000 tonnes in 1999/00 and domestic consumption tipped to return to 1,00,000 tonnes from 80,000 tonnes in 1998/99 because of economic recovery. Exports totalled 3,30,000 tonnes in 1998/99. Output was quoted at 3,81,000 tonnes plus carry-over stocks of 20,000 tonnes. The Lampung office of the directorate-general of plantations said lack of good-quality seeds had hampered development of the coffee industry in that province, which together with South Sumatra and Bengkulu accounts for 70 per cent of national output. ``Vietnam learned from Lampung how to grow coffee back in the '80s. But they manage to develop their crop,'' said one source at the Lampung office of the coffee association. ``The threat that Vietnam will overtake our position is there, but I think buyers arealready accustomed to Indonesia's robusta coffee. They will always come to Indonesia for robusta coffee.''

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