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Friday, 25 October, 2002, 15:11 GMT 16:11 UK
Bitter harvest for Vietnam coffee farmers
Vietnamese coffee
Vietnam has become overly reliant on coffee
Vietnam, the world's second-biggest coffee exporter, has predicted that bad weather and weak prices could cause its bean output to shrink by almost one-third this season.

The country's coffee exports in the 2002-03 crop season could some in at 500,000 tonnes, down 30% from the previous year.

The country's coffee industry body - the Vietnam Coffee and Cocoa Association - said producers were receiving $450 a tonne, compared with the $2,000 they earned six years ago.

Ironically, the fall of the price of coffee has been largely caused by Vietnam's emergence as a major exporter.

Wanted: a rally

The news of Vietnam's dwindling crop, combined with talk of dry weather in Brazil, the world's top producer, produced a jump in coffee prices on Friday.

Vietnam coffee fields
Farmers are scaling back investment

London coffee futures jumped by 5%, hitting a two-year high of $743 a tonne.

But it will take a more sustained rally to bail out Vietnam's economy, which has suffered from its growing reliance on the crop.

The country earned some $260m from coffee in 2001-02, just over one-third as much as it brought in four years earlier.

Falling prices have caused a vicious spiral, as Vietnamese farmers cut the amounts of water and fertiliser they apply to their fields, thereby further reducing the yield and quality.

The international charity Oxfam recently launched a campaign to highlight the plight of the developing world's coffee growers, who it claims receive too low a proportion of the revenue from coffee sold in the West.

See also:

18 Sep 02 | Asia-Pacific
17 Sep 02 | Business
03 Jul 02 | Business
21 Jan 02 | Business
22 Apr 02 | Business
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