Wednesday, August 29, 2007

Vietnam coffee crop to decline

Coffee output in Vietnam, the world's top robusta producer, is forecast to decline 10 to 15 percent this year to around 16-18 million bags from a record crop last year, a leading industry official said.

"Last year it was a bumper crop and post that yields usually drop," said Vivek Verma, managing director of Olam International's coffee division. "It could have been worse but high prices encouraged farmers to take good care."

Coffee crops typically move in bi-yearly cycles, with a good harvest followed by smaller one.

A lower crop in Vietnam plus a global deficit of 4 million bags according to a Reuters poll in July, may support London's robusta futures market prices.

But Verma said London robusta futures, which have declined from highs, were expected to trade between $US1600 ($NZ2276) to $US1750 a tonne because of easing global supplies.

"I don't think we will go back to $US1800-$US1900 range very soon now, unless something happens to (the) Brazilian crop or there is major disruption in supplies," he told Reuters in an interview. ...more....