Vietnam Coffee Annual Report 2015

      Coffee cultivated area continues to expand in some areas of Lam Dong and Dak Nong Provinces in the current crop, but has decreased in some areas of Gia Lai Province due to competition from other crops such as black pepper.  Post maintains its estimate (taking into account updated information from the Ministry of Agriculture and Rural Development (MARD), Provincial Departments of Agriculture and Rural Development (DARDs), and the local coffee industry) for total coffee area at 670,000 ha in 2015. Following years of targeting 500,000 ha as the “sustainable” level of Vietnamese production, the Vietnamese Government recently increased the target to 600,000 ha, taking into account the continued expansion of coffee area across at least 10 provinces.   
 
        Post’s initial forecast of MY 2015/16 production is 28.7 million bags, or 1.72 MMT of green coffee beans, an approximately 1.8 percent increase from the previous MY due to good flowering and cherry setting and no signs of adverse weather, despite some claims of drought-like conditions in the Central 
Highlands.  Post’s initial total coffee export forecast for MY2015/16 is 27.04 million bags, or 1.62 MMT GBE, an increase of 2.3 percent over the previous year due to larger exportable supplies and further development of soluble coffee exports. 
 
       Post revises its estimate of MY2014/15 production downwards to 28.2 million bags, or 1.69 MMT, a drop of 4 percent from the previous estimate (1.76 MMT) due to lower than expected Robusta yield and weather-induced yield loss in some Arabica growing areas.  Farmers have characterized MY 2014/15 as 
a “down year” following record MY 2013/14 production.  Post revised its estimate for MY 2014/15 green coffee exports at 25 million bags, or 1.5 MMT GBE due to smaller exportable supply and because farmers and middlemen are withholding supplies due to falling world prices.  Should prices not exceed 
the 40,000 Vietnamese Dong per kilogram mark, Vietnamese exports will be significantly reduced for the rest of the current MY, putting pressure on farmers during the start of the harvest of the MY 2015/16 crop.  Post revises its estimate for MY2014/15 total coffee exports down to 26.43 million bags (1.59 
MMT GBE) due to decreased exportable supplies more than offsetting increased exports of soluble coffee.   
 
        Post maintains its estimate of MY 2014/15 domestic consumption at 2.08 million bags, or 125 thousand metric tons (TMT) GBE.  Post’s initial forecast for MY2015/16 domestic consumption is 2.17 million bags, or 130 TMT GBE with a growth rate of about 4 percent.