Hanoi, Oct 20 - Vietnam, the world's second-largest coffee producer after Brazil, has started harvesting its 2008/2009 crop and there should be ample supply when the process peaks in 20 days, dealers and a coffee farmer said on Monday.
The start of the harvest in Vietnam, the world's top robusta exporter, may not have an immediate effect on global markets, where sugar and coffee futures recovered last Friday after being savaged by the commodity liquidation that has hit the sector.
Soft commodities were unable to get directions from the global financial markets, from which they have taken their cue until recently, as signs of a looming recession deepened amid the worst financial crisis in 80 years.
Vietnam's new crop is forecast to produce 20.5 million to 21.3 million 60-kg bags, at least 20 percent higher than the previous season's output of nearly 17 million bags, traders say.
"We have now started picking cherries but only about 10 percent of cherries on the trees are ripe. The harvest could be in full swing in 20 days," grower Nguyen Ba Du said from the central province of Daklak.
The weather has improved and rains from recent low tropical pressure systems have stopped in the Central Highlands, Vietnam's coffee belt, while winds were mild, giving growers good conditions for harvesting and drying, forecasters said. But market prices have not been supporting production.
Du said he would have to hire extra labourers as usual to pick cherries when the harvest peaks from mid-November, but farmers in his Krong Buk district would aim to shorten the harvesting by a month in December to save production costs.
On Monday prices fell to 26,000 dong ($1.57) per kg of robusta in Daklak, Vietnam's largest coffee growing province, 20 percent down from a month ago and nearly half the record price of 40,000 dong per kg in late February.
In Daklak's northern neighbour province of Gia Lai, farmers have also started picking ripe cherries but domestic roasters said they would not rush to buy now.
"I have seen farmers drying cherries in front of their houses now but the early cherries do not taste good, so I should wait until the latter stage of the harvest to get beans with better quality," an executive of a Vietnamese roaster firm said.
"Foreign buyers may like to buy early while we have been using old beans as the new cherries have sourer taste," he told Reuters by telephone from Pleiku, the capital of Gia Lai province.
The coffee harvest runs from late October to January in the Central Highlands, which comprises five provinces, with Daklak, Lam Dong and Gia Lai the largest among them.