* 2010/11 output seen at 1 mln T 
   * Stockpiling plan being considered 
 (Adds context paragraph 2, trader comments paragraphs 6-7) 
   By Ho Binh Minh 
   HO CHI MINH CITY, Dec 8 (Reuters) - Vietnamese coffee  prices are forecast to fall 14.3 percent from the current  level to 30,000 dong ($1.54) per kg when supplies become ample  at the harvest peak later this month, a government official  said on Wednesday. 
   "At the main harvesting period and when the coffee harvest  ends, the coffee price heat may cool," said Doan Xuan Hoa, a  deputy director in the country's agriculture ministry.  Vietnamese coffee prices, which closely track the London  moves, rose to 25-month high last month before easing to  35,000 dong per kg this week.  
  

  Ample supply of coffee at the end of the harvest in  Vietnam, the world's largest producer and exporter of robusta  beans used for making instant coffee, could put pressure on  London futures which also hit a two-year high last month. 
   On Tuesday Liffe March robusta coffee futures <LRCc2>  closed up $17 at $1,877 a tonne, underpinned by rain delays to  the harvest in top robusta producer Vietnam. 
   Vietnam's coffee harvest is due to peak this month and  ends in January 2011, when farmers sell part of their beans  for cash to mark the Lunar New Year festival in early February. 
   "The Lunar New Year is a big celebration and they need  money so by January you'll see many of the beans flood the  market," said Lim Boon Kheng of Malaysia's Haco Asia Pacific. 
   "We expect supply to improve very quickly from end  December and in January supply will be very high as farmer  will rush to sell bean before taking a week-long holiday in  February," said Van Thanh Huy, a major coffee trader in  Daklak, the country's top coffee growing province. 
   The agriculture ministry has proposed the government allow  exporters to stockpile coffee to help reduce pressure on  suppliers at the start of the new crop, and "a decision was  being considered", Hoa said in written answers to Reuters  questions. 
   The stockpiling plan targeted between 300,000 tonnes and  500,000 tonnes, or more than 40 percent of the 2010/11 crop in  the world's second-largest producer after Brazil, to be set  aside from trade for six months to prevent price falls and  ensure a profit for farmers of at least 30 percent. 
   Traders said it was highly unlikely the plan would be  approved at this time of the October 2010-September 2011 crop  year, given coffee prices are now about 75 percent above  farmer production costs. 
   Exporters would need nearly $1.8 billion to buy all the  beans from farmers, based on the current domestic price. 
   Presently farmers are worried about rain disrupting  production, a factor supporting prices. 
   Rains this month in the Central Highlands coffee belt have  made it difficult for farmers to speed the harvesting, leading  to a low stock level in Vietnam, Hoa said.  
    
   LOW STOCKS 
   Hoa also said low coffee stocks in producing countries  would help prevent coffee prices from falling too sharply at  the harvest end. 
   His price forecast of 30,000 dong per kg is 25 percent  above prices at the end of the previous harvest in late  January 2010. 
   Coffee prices should remain relatively high in the short  and medium-term, buoyed partly by low stocks and increased  production costs, the then executive director Nestor Osorio of  the International Coffee Organization said in October. 
   The rainy season ended in late November, a month later  than usual, which prevented Vietnamese farmers from drying  cherries and also delayed the processing of ripening, concerns  that helped lift London prices to a two-year high last month. 
   The Vietnam Coffee and Cocoa Association (Vicofa) has  asked the government to grant exporters sufficient funds for  six months so they can be more active in buying beans and  avoid any possible price disadvantages, Hoa said. 
   The current crop could produce around 1 million tonnes, or  16.67 million 60-kg bags, similar to the previous 2009/2010  output, he said. 
   Hoa's output estimate is above a forecast by Vicofa  chairman, who said on Tuesday that output may drop 10 percent  to 15.8 million bags from previous estimates as dry weather  followed by prolonged rains in the key growing region produced  smaller beans. 
   A Reuters poll of traders in October found that the  current harvest could rise more than 2 percent to 19.77  million bags.  ($1=19,490 dong) 
    
   (Editing by Ed Lane) 
   (Additional reporting by Apornrath Phoonphongphiphat)  
    
Wednesday, 08 December 2010 09:00:11