Coffee farmers in Vietnam, the top grower of Robusta beans used by Nestlé, will probably gather a record crop next season as yields recover.
Production in the year starting October may jump 13 per cent to 1.8 million metric tons, according to the median of nine trader and analyst estimates compiled by Bloomberg. Output will drop to 1.6 million tons this year from 1.72 million tons in 2013-14, the biggest crop ever, the survey shows.
Futures lost 10 per cent in the past 12 months, slumping to a one-year low in London on Wednesday, as crop prospects improved in Brazil. The South American nation is the second- biggest producer of Robusta and the top grower of Arabica beans favoured by Starbucks Corp. The global coffee harvest will increase 7 per cent in 2015-16, trimming a deficit forecast to be the biggest in nine years, says Volcafe Ltd.
“My yield will increase from 3 tons per hectare to 4 tons in the next season,” said Pham At, a 60-year-old farmer in Dak Lak province, which accounts for about 30 per cent of the country’s output. “The off-year will be followed by an on-year. It’s the nature of the coffee tree.”
Weather conditions from now until October are crucial, Tong Teik Pte, a company owned by RCMA Commodities Asia Pte, said in a report. The weather is dry and sunny, which is normal for this time of year, while good flowering is raising hopes among farmers for a larger crop, it said. Bean collection from the 2014-15 crop ended in about January.
Even as supplies are forecast to increase in the next season, farmers for now are holding back sales in anticipation of higher prices, according to the survey. Growers sold 650,000 tons by end-February, or 41 percent of the 2014-15 crop.
Bloomberg News, edited by ESM