Rain delay may damage Vietnam coffee industry

The rainy season is expected to be two weeks late in Vietnam's parched Central Highlands coffee belt, damaging this year's crop and threatening the long-term producing potential of the world's largest robusta producer. "The rains this year will be later than in the past years, starting between mid-May and the end of the month," Phan Muu Binh, director of the Agriculture Department of the central highland province of Daklak, told Reuters in an interview.
"Even though there has been scattered rains recently, we have chosen to carry out the province's agro-production plan on the case of the rainy season's late arrival," he said in an interview.
Last week, traders in London said dry weather in Vietnam remained the main focus for the futures market in robusta. Investors were waiting to see whether trees recover from the drought.
Daklak, which accounts for one third of Vietnam's coffee output, has been stricken by drought since September.
The dry season normally ends in late April.
Binh said the drought had ruined 25,000 hectares (60,000 acres) of coffee in Daklak - up from a previous estimate of 20,000 - and that and a further 75,000 hectares was at risk.
He declined to detail the losses, but Daklak officials and exporters said last month 100,000 tonnes of beans would be lost - equivalent to over 30 percent of last year's already disappointing harvest.
The lost production is worth about $90 million at local prices, which firmed to 14,400 dong (91 US cents) per kg on Monday from 13,900 dong last week.
That loss figure does not include growers's investment of about 60 million dong ($3,800) in each hectare of coffee.
Daklak has 163,000 hectares of coffee and an average yield of 2 tonnes of beans per hectare. It produced 320,000 tonnes from the latest harvest ending in January, Binh said, below traders' estimate of 350,000 tonnes.
"The drought in Daklak has peaked," Binh said, adding that apart from coffee, 5,000 hectares of rice and corn had been destroyed.
Binh said trees would surely be cut on the 25,000 hectares damaged while officials and farmers would assess the impact of the drought next month to decide the fate of the trees on the affected 75,000 hectares.