Coffee Supplies From Vietnam Seen Shrinking Further Under Current Heat Wave

Global supplies of robusta coffee, used in espresso and instant drinks, are set to tighten further due to a heat wave in top exporter Vietnam, which is causing farmers to switch to alternative crops like durian, avocados, and passion fruit. Exports are expected to decline as much as 20% in the year through September from the 1.67 million tonnes shipped a year earlier, according to the nation’s coffee association. The last harvest is now over, and output is seen as 20% lower than the 1.84 million tonnes gathered the year before. This decline is attributed to climate change, lack of investment, and growers planting other crops. The shift to other crops is taking a bigger bite out of production, with stockpiles with farmers and buying agents being “not much.” The drop in production has driven robusta futures in London up by more than 50% in the past year, reaching the highest since at least 2008. Prices in Vietnam have more than doubled from a year earlier to a record, and the crop later this year in Vietnam may do little to relieve supply tightness.

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