Harvesting coffee in Huong Hoa, Quang Tri Province. The nation's coffee output is predicted to decline 25 per cent this year. — VNA/VNS Photo Ho Cau

HA NOI (Biz Hub) — Viet Nam is expected to produce a 25 per cent lower output of coffee this year against a record output of 315,500 tonnes last year, according to the Viet Nam Cocoa and Coffee Association (Vicofa).

The fall is due to lack of rain during the time coffee trees were flowering.

The Ministry of Agriculture and Rural Development (MARD) said coffee exports would slow down in coming months due to low stockpiles and slow sales.

The export of Vietnamese coffee fell by 29.9 per cent in April to 110,000 tonnes and was estimated to drop further in May.

Coffee exports in the first five months this year fell by 23 per cent in volume to 697,000 tonnes and by 22 per cent in value to US$1.49 million.

National stocks are low because growers sold a large volume of coffee when the price was VND43 million per tonne.

This could make coffee prices higher in coming months, the ministry said.

On Wednesday, coffee beans sold for VND41 million per tonne and the export price stood at $1,934 per tonne in the Tay Nguyen (Central Highland) provinces.

The association expects consumption of coffee on the world market to increase in the next 18 months from the 139 million bags (60kg/bag) last year.

Meanwhile, the world stock fell by 17.1 per cent to 15.1 million bags compared with the same period of last year.

In 2012, Viet Nam earned $3.5 billion from coffee exports, accounting for 5 per cent of the nation's exports.

At present, coffee is grown on more than 500,000ha, but in an industry development plan, the Government wants to lower this figure.

To increase the quality of coffee plants, the association said one-third of the plants were ageing and need to be replaced.

It is forecast that in the next 10 years, about a half of the nation's coffee plants must be replaced.

The association has sent a petition to the ministry asking for the establishment of a stabilisation fund for the development of the coffee industry.

The fund would come from coffee export revenue, plus money mobilised from the coffee-growers.

It has also asked the Government to lend the money to farmers at low interest rates. — VNS