Vietnam's coffee production is forecast to rise to 21.5 million (60-kg) bags during the 2008/2009 crop year, a U.S. Agriculture Department attache in Hanoi said on Thursday.

The attache said improved weather conditions, higher yields and a larger crop area will boost production 23 percent in 2008/2009, compared with a year earlier.

Heavy rainfall pushed the 2007/2008 coffee output forecast down 17.6 percent to 17.5 million bags. Coffee exports for 2007/2008 are also expected to fall 13.6 percent to 17.23 million bags.

Attache reports are not official USDA data.

"Vietnam's coffee production forecast for CY 2007/2008 is set at 1.05 million metric tons or 17.5 million 60kg bags due to unfavorable weather conditions in the main coffee growing areas and anticipated lower yields than the previous crop year. This represents a decline in production of around 17.6 percent from the last crop year, though still 28 percent more than the 13.66 million bags of the 2005/2006 crop year. The outlook for CY 2008/2009 is much brighter, however, with an expected output of about 21.5 million 60 kg bags. This projected 23 percent increase in production is premised on expected improvement in weather conditions and yields as well as some increase in the growing area.

Despite government efforts encouraging farmers to switch from coffee to other crops in marginal growing areas, coffee farmers continue to expand their production area in response to high coffee prices. The demand for Robusta and Arabica coffee seedlings remains strong, though Arabica coffee still accounts for only 2.3 percent of total coffee production. Both government and the industry are engaged in efforts to improve Vietnam's coffee quality with an eye to increasing global market share. Thought is also being given to encouraging increased local consumption.

Coffee exports for CY 2007/2008 are expected to be 13.6 percent lower than the previous market year due to the anticipated lower