Vietnamese Coffee Areas Get Thundershowers, Wet Season Eyed

Belfast (CoffeeNetwork) Vietnam's key coffee areas have had thundershowers recently and these are expected to continue the next few days, before widespread rainfall arrives from the end of this week. If the current charts prove correct, this could signal the true start of the annual May/October wet season.

Local weather forecasts for Buon Ma Thuot, the capital of Dac Lac (Vietnam's largest coffee area), are calling for 6-10mm of rain daily for the next three days.

 Sporadic wet weather so far in May has fuelled the reports, which tend to circulate this time every year, of adverse impact on Vietnamese coffee production. Every year reports highlight that the coffee crop will be hit because of dry weather, but the fact is that it is always dry until some time in May. Vietnamese flowering takes place February/March, during the dry season, with the May/October wet season crucial for development of the crop. Increased rains mean less cost for growers in irrigation terms.

 Local sources tell CoffeeNetwork that flowering was good for the next 2015/16 (Oct/Sep) crop and a modest increase could be expected year-on-year purely on the basis of flowering. For that reason, CoffeeNetwork has been looking at 30 million bags, until reports of crop development during the wet season are assessed.

 However, some reports coming out of Vietnam this week continue to project a notable year-on-year drop in 2015/16 output.

 Moreover, there are continued reports citing Vicofa as putting the current 2014/15 crop substantially lower on the year. These low estimates, of down around 22 million bags as opposed to the generally accepted 28 million bags plus, are being fuelled by a decline in exports year-on-year at present.

GSO export data puts October/April shipments at 0.8 million bags, over 30% down on 1.1 million bags in the same 7 months a year earlier.

Local traders say however that this drop is not due to less production, rather it is due to sellers withholding supply in the hope of better prices in the last few months of the 2014/15 coffee season, and also to growing domestic consumption.