Vietnam may cut robustas, eyes arabicas: Sources

Vietnam may cut robustas, eyes arabicas: Sources

SINGAPORE (Reuters): Vietnam, the world's largest robusta
coffee producer, may destroy some plantations to reduce
oversupply and promote the aromatic and higher quality arabica
variety, industry sources said on Thursday.

Indonesia is also seeking to boost arabica output, but so far
it is growing at a snail's pace because of high maintenance
costs, soil, altitude and climate requirements.

Both Vietnam and Indonesia have some mountainous areas
suitable for arabicas. Robusta is usually grown in very hot and
humid climates, while Arabicas are grown in cooler climates
either further from the equator or at higher altitudes.

"There's too much robusta production," Doan Trieu Nhan,
chairman of state-affiliated Vietnam Coffee and Cocoa Association
(Vicofa), told Reuters by telephone.

"According to our program, we have to change the ratio between
robusta and arabica areas. Maybe, we have to decrease (or)
destroy some robusta plantations," he added.

Nhan said the Vietnamese government had agreed with Vicofa's
proposal to cut robusta plantation areas to 300,000-400,000
hectares from more than 450,000 hectares.

"I have to decrease (plantation areas)...we have to grow new
arabica plantations," said Nhan, adding that plantations under
arabica in Vietnam totaled only 20,000 hectares.

Nhan said arabica plantations could be expanded to some
100,000 hectares in the near future.

Online analyst Commodityexpert.com urged Vietnam and Brazil
this week to lead a global effort to produce less coffee as
London futures touched a 30-year low on Monday at US$516 a ton
(basis September).

Vietnam has been widely blamed by the coffee world for
expanding output and flooding the market over the past two years.

But the country's 2001/2002 coffee crop output is forecast to
drop between 20 and 30 percent from some 840,000 tons in
2000/2001 due to lower use of fertilizer. Industry sources said
arabicas now accounted for about 8,000 tons a year.

Vicofa's Nhan said a reduction in robusta plantation areas
would surely cut production, but he gave no details.

Vicofa said earlier that Vietnam, with a population of around
70 million, also aimed to increase internal consumption to one kg
per capita annually from just 0.2-0.3 kg currently in an effort
to restructure its coffee industry.

Indonesia

Traders in Indonesia said the country planned to boost arabica
output to some 35 percent of its total production in the coming
years from about 12 percent now, but high growing costs and
difficulties in finding suitable areas restricted growth.

Indonesia's coffee production is expected to reach 340,000
tons in 2000/2001 from 380,000 tons in 1999/2000 due to bad
weather.

Some traders in Indonesia said arabica farmers managed to
collect money even though the aromatic variety was also suffering
from a glut in supply.

"There are plenty of arabica grades and each grade has
different prices. So I guess, there's always a benefit to grow
arabica," said one trader in Medan, on Sumatra.

Robusta coffee ex Lampung on Sumatra only fetched up to Rp
3,200 ($0.33) a kg compared with Java Arabica, which was offered
at up to Rp 14,500 ($1.43) a kg.

Mandheling Arabica, also from Sumatra, was around Rp 13,900
($1.42) a kg.