* Investment should boost output - CoffeeNetwork analyst
   * Vietnam coffee prices jumped 56 percent last year
   (Adds comment, prices)
   By Ho Binh Minh
   HANOI, April 18 (Reuters) - Vietnam's new 2011/2012 coffee crop is forecast to produce 22 million bags, up 10 percent from the current crop after higher prices spurred investment, an analyst at CoffeeNetwork said.
   Farmers since last year have been investing profits in production, boosting the latest harvest beyond initial expectations. The harvest ended in late December, about a month earlier than usual.  
  

   Higher production in Vietnam, the world's second-largest producer after Brazil, could help curb rising global coffee prices which may result from lower output expected in Indonesia this year.
   "The suggestion is that Vietnam's 2011/12 crop will rise from 2010/11 due to improved prices -- even though production costs are higher due to fuel costs/wages et cetera," analyst Andrea Thompson at the coffee information firm wrote in an email to Reuters.
   "This will make it difficult for LIFFE robusta prices to test recent highs. Such a test would require fresh fundamental news, such as a severe impact of weather on Vietnam's 2011/12 crop," she wrote.
   Coffee prices in Vietnam, which closely track the London robusta futures market, jumped 56 percent last year.
   Vietnamese robusta prices have gained another 30 percent so far this year, jumping to around 48.4 million dong ($2,320) a tonne on Monday in the key growing province of Daklak.
   Vietnam's 2010/2011 coffee output rose 5.5 percent from the previous crop to 18.5 million bags, while production in Indonesia would fall 25.3 percent due to rainy weather, the International Coffee Organization said in its March report. 
   The ICO revised up its estimate of Vietnam's crop from 18.43 million bags in earlier projection. Last December the country's coffee industry body, the Vietnam Coffee and Cocoa Association, forecast that output may drop 10 percent from previous estimates. 
   Farmers have been stepping up watering trees in the Central Highlands coffee belt during the current peak of the dry season, before rains return.
   The rainy season will arrive in the Central Highlands and in the southern region that includes the Mekong Delta food basket later this month, which is earlier than usual, a state-run newspaper reported on Monday. 
   ($1=20,860 dong)
    (Editing by Jason Neely)  
    
Monday, 18 April 2011 18:24:13