Coffee output falls in Vietnam as more farmers turn to durians, property

VIETNAM – Vietnam’s production of robusta coffee likely shrank in 2023 to the smallest in four years as farmers focused more on growing durians and were drawn away by a property boom.

The harvest fell more than 7 per cent from the previous year to 1.67 million tonnes, according to the median estimate of exporters and traders in a Bloomberg survey. Crop expectations gradually declined as the harvest progressed.

The global market for robusta beans – the type used in instant drinks – has grown as roasters and consumers seek cheaper options to cope with high inflation.

Prices have also been supported by worries about the impact of weather on some key crops. That has driven futures for the variety up 35 per cent this year in London to the highest level in more than a decade.

“Actual output was lower than people had forecast,” said Mr Phan Hung Anh, chief executive of exporter Quang Minh Coffee Trading in the southern Vietnamese province of Binh Duong. “Growers invested less in their coffee farms because their eyes were fixed on growing durians and other profitable fruit.”

Another coffee shipper, Mr Le Duc Huy, general director of Simexco Daklak, said the smaller harvest was explained by a down year in the crop production cycle, increases in fertiliser costs and a property boom early in 2022, which pulled some growers away from farming.

The reduced crop and strong demand spurred a surge in local coffee prices to 53,000 dong (S$3) a kg in April, the highest since at least 2014. Farmers have sold more than 85 per cent of their crop and exports have been running at a fast clip.

The country shipped a record 1.16 million tonnes of coffee in the first seven months of the season, according to Customs and statistics office data compiled by Bloomberg. But the pace may slow over the rest of the season. BLOOMBERG