Vietnam's robusta exports may rise

Vietnam's robusta exports may rise

SINGAPORE (Reuter): Vietnam's robusta exports are forecast to
grow by 10 percent in the 1997/98 (Nov/Feb) season to 300,000-
320,000 tons, overtaking Indonesia as Asia's leading coffee
exporter, dealers said yesterday.

"Vietnam could take the number one spot this year," one dealer
said. "It (Vietnamese robusta exports) is going to be at least 10
percent more at around 300,000-320,000 tons."

"It's going to be a good crop in Vietnam," another trader
said. "Minimum, it should be at least 300,000 tons."

Rains in Vietnam have been adequate and there were no reports
of any disease affecting the crop, the traders said.

The steady growth in Vietnam comes at a time when Indonesia's
robusta exports are seen falling at least 30-40 percent to around
270,000 tons this year after rains and strong winds stripped
coffee trees of their flowers in 1996. `

The country is also expected to export around 30,000 tons of
arabica beans, dealers said.

"I think Indonesia would be lucky to export 300,000 tons of
coffee this year," one said.

Robusta coffee, which is more bitter in taste than higher
grade arabica, is used extensively in instant coffee.

Indonesia is currently the world's largest producer of robusta
beans, while arabica coffee is grown mostly in Central and South
America.

The outlook for Indonesia in 1998 remains cloudy because of a
dry spell, believed to be linked to the El Nino weather pattern,
which may sharply trim production next season.

"It is dry. If it is like this for the next two-three weeks,
we would be concerned," one trader said.

El Nino, a phenomenon named after the Christ child to describe
the appearance around Christmas of warm Pacific Ocean
temperatures off the coast of South America, wreaks havoc with
weather patterns worldwide.

Meteorologists have warned this year's El Nino, expected to
peak in December, seems to have arrived early and may rival the
century's worst in 1982-1983.

That one blistered crops in Indonesia, Australia, the
Philippines and southern Africa with drought and caused severe
flooding elsewhere.

"We're very worried about the situation in Indonesia. We have
to monitor that situation very carefully," a dealer said.

Supplies of coffee beans from Indonesia are tight while
inquiries for spot coffee from roasters in Europe has started to
pick up, dealers said.

"We're having a tough time getting the beans. I don't think
the supply situation will improve," one said.

Another dealer said they had expected demand for spot coffee
to pick up around the middle of August.

"It has started earlier and there is no coffee left in
Indonesia," he said.

But another trader said some exporters in Indonesia were
holding back supplies from the market to drive prices up.

"They're playing a game," he said. "They're trying to hang
onto their stocks."

Regional coffee dealers forecast London robusta coffee futures
would open unchanged to US$30 a ton higher later on Wednesday.

"It maybe $20-$30 up," one dealer said.

"The trend looks sideways. I don't see it going up much
further," another said.

In London, the Economist Intelligence Unit (EIU) said world's
1997/98 exportable coffee production could top 80 million 60-kg
bags for the first time in history, spearheaded by a cyclical
upturn in Brazil.

For comparison, the exportable crop is estimated at 78.4
million bags in 1997/98 and 74.1 million in 1996/97, it said.

The London-based think tank said new plantings of recent years
should also boost 1998/99 Brazil output.

Government efforts to increase production have already been
signaled in other countries including Mexico, it said in its
third quarter commodity forecast report.