Vietnam plans to expand arabica area, double output by 2020

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Vietnam, already the world's biggest producer of robusta coffee, plans to expand its planting area for arabica in a bid to more than double output of the superior-quality bean to 96,000 tons by 2020, though industry officials said production could be even higher.

The Southeast Asian nation, the world's No.2 coffee producer after Brazil, will expand its northern and central arabica area to 40,000 hectares (99,000 acres) over the next eight years, an Agriculture Ministry official said.

Estimates on Vietnam's current arabica area range from 32,000 to 38,000 hectares, though it has no central agency able to give exact crop data.

"We aim to keep the area stable at (40,000 hectares) until 2030," Pham Van Thanh, a manager in the ministry's crops department, told Reuters on the sidelines of an industry conference.

Arabica coffee requires wet processing to ensure the higher quality of its beans, something many domestic processors have yet to embrace due to limited funding and unstable domestic supplies, some officials said.

The government said in a plan seen by Reuters that output of arabica would rise to 96,000 tons by 2020, accounting for 9 percent of the country's total coffee output that year. It did not say how much would be invested in the expansion.

But Thai Hoa Vietnam Group, Vietnam's top exporter of arabica, said the country was more likely to be producing 120,000-150,000 tons of the variety by 2020.

Vietnam's arabica output in the next 2012/2013 crop year will rise 12 percent from the current season to between 55,000 and 57,000 tons, or 917,000-950,000 bags, Thai Hoa Vietnam Chairman Nguyen Van An said earlier this month.

The country could replace robusta with arabica in some areas with a suitable climate, Vietnam Coffee and Cocoa Association Chairman Luong Van Tu told the conference.

The more aromatic arabica, normally sold for around double the price of robusta, can be grown in cool climates in areas some 1,000 meters above sea level.

Robusta beans account for 97 percent of Vietnam's coffee production. The country is estimated to produce 22.25 million bags in the upcoming 2012/2013 crop year, based on a Reuters poll of 29 analysts and traders on Wednesday.

That would be down from 24-25 million 60-kg bags in traders' estimates for the 2011/2012 crop due to end in September.

Vietnam's coffee exports between October 2011 and this month could have risen 25.2 percent from a year ago to 1.44 million tons, or 24 million bags, government data showed on Thursday.

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