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Vietnam's coffee exports grind their way through historic drought

By Bui Hong Nhung August 30, 2016 | 01:38 am PT

Forecasts have increased by 50 percent in the wake of positive figures.

Vietnam’s coffee exports hit 1.27 million tons in the first eight months of 2016, surging 40 percent compared to the same period last year, according to data from from the Ministry of Agriculture and Rural Development.

Export value also grew by 20.7 percent on-year to touch $2.25 billion.

These results have prompted the Vietnam Coffee and Cocoa Association (Vicofa) to adjust its forecast for coffee exports this year up to 1.5 million tons from the one million tons previously predicted.

Vietnam mainly exports raw coffee materials, so trading prices were set fairly low.

The average export price of Vietnamese coffee was $1,754 per ton, down 14.5 percent on year, while the average price of coffee traded globally was $2,367 per ton, according to the International Coffee Organization.

Since the end of 2015, an historic drought coupled with saltwater intrusion have hit the Mekong Delta region as well as the Central Highlands, Vietnam’s coffee belt. The worst drought in a century has ruined 18 percent of Vietnam’s coffee plantations or some 110,000 hectares of coffee.

Many farmers have been forced to cut down their coffee trees to make way for pepper crops, which offer higher returns and require less water.

Vicofa forecasts that the drought could also hit the 2016-2017 coffee harvest that starts in October, with numbers falling by up to 30 percent from the 1.63 million tons collected in 2015-2016.

> Expectations of poor robusta coffee crops could spur price rally

> Historic drought cuts Vietnam’s coffee exports by 25 percent