Vietnam's Coffee Harvest Delayed by Rainfall, Ea Pok's Tu Says

By Van Nguyen

Nov. 17 (Bloomberg) -- The coffee harvest in Vietnam, the world's biggest grower, may be hampered as an approaching storm adds to heavy rains, according to Cao Van Tu, director of Dak Lak- based Ea Pok Coffee Co.

``We can't harvest the ripe beans,'' Tu said today by phone from the Central Highlands province of Dak Lak, the country's biggest coffee producer and exporter. ``I'm afraid we will not be able to have enough stock for delivery in December.''

Delayed shipments may spur a rebound in the price of robusta beans, which has tumbled by a fifth over the past year. Tropical Storm Noul, the 26th storm of the northwestern Pacific cyclone season, is due to buffet central and southern Vietnam today after the heaviest rains in at least 24 years caused floods last month.

Rainfall in Dak Lak also disrupted harvesting and drying last week, Tu said. His staff had only a few sunny days to dry the crop and some workers were today trying to collect as many ripe beans as possible in the rain, he said.

Robusta futures have slumped 19 percent over the past year, closing at $1,829 a metric ton on the Liffe exchange on Nov 14.

Strong wind and heavy rains from Noul are expected to hit the Central Highlands today, according to the National Weather Forecasting Agency. The region accounts for about 91 percent of the country's coffee production, according to Thoi Bao Kinh Te Vietnam newspaper, citing data from the Ministry of Agriculture and Rural Development's cultivation department.

``We're sitting by the fire as it has been raining all the time,'' said Tu. ``Usually it doesn't rain this much.''

The rains will compound the problems faced by Vietnam's coffee traders, who were already battling high borrowing costs and a shortage of credit to fund coffee purchases, Tu said.

The Southeast Asian nation's lending rates are still the second-highest in Asia at 12 percent after the central bank's two percentage-point rate reductions in the past month. Banks charge clients between 16.5 and 18 percent on loans, the State Bank of Vietnam said in a statement on Nov. 14.

To contact the reporter on this story: Van Nguyen in Ho Chi Minh City at vnguyen23@bloomberg.net