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Last Updated: Thursday, 22 May, 2003, 09:46 GMT 10:46 UK
Vietnam plans chop for coffee crop
Vietnamese coffee
Vietnam's success has caused prices to slump
Vietnam, the world's second-largest coffee exporter, plans to destroy one-fifth of its coffee plantations in an attempt to lift prices.

Doan Trieu Nhan, chairman of the Vietnam Coffee and Cocoa Association, said the government wanted to cut the 500,000 hectares under cultivation by 20% by 2005.

"We hope we can achieve this target but it will be challenging because at the end of the day it is the farmers' decision and we cannot force them, particularly with the recent small rise in coffee prices."

Vietnam has been blamed for the global slump in coffee prices after entering the market about 10 years ago.

It produced a record 900,000 tonnes in 2000-01 to become the second-biggest international supplier, after Brazil.

Coffee overdose

But Vietnam's success in establishing a leading global coffee industry resulted in prices crashing to a 30-year low in 2001.

This year's output is expected to be about 520,000 tonnes.

Earlier this week trade in the robusta coffee, of which Vietnam is the largest exporter, ground to a halt as growers held back from the market because of low prices.

Prices in Daklak, which produces 60% of Vietnam's coffee, fell this week to 9,650 dong (62.5 US cents) per kilogramme from 9,950 dong last week.

The World Bank data shows that coffee prices in real terms are less than one-third of their 1960 level, making returns for the world's estimated 20 million farmers less than the cost of production.

Coffee experts have said that Vietnam should improve the quality of its crop.

Coffee crisis tops summit agenda
19 May 03  |  Business

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