A shortage of Robusta coffee beans in Vietnam, the world’s biggest producer of the bitter bean variety, threatens to push the price of already expensive lattes even higher.
Futures prices for Robusta coffee beans, which are primarily used to make espresso, instant coffee and some powder blends, have risen about 50% in London this year, pushing prices to their highest level in about 20 years, according to Bloomberg. That’s what it means. .
Reduced yields in Vietnam, where a third of the world’s Robusta beans are produced, have left farmers struggling to grow crops, exporters struggling to source supplies and coffee-loving consumers This is a cause of high costs for the company.
Tran Thi Lan Anh, vice president of Vietnam’s leading exporter Binh Hiep Co., Ltd., told Bloomberg that farmers and intermediaries are worried that the price of beans will rise from the current level of about $5.13. It predicts that the price could reach $5.89 per kilogram.
Using a standard single-shot joe, 1 kilogram of coffee beans yields 120 to 140 cups of coffee.
Therefore, the price of a pound of beans can directly impact how much a coffee shop charges its customers for their morning caffeine intake.
But “we don’t know when prices will peak,” she added.
Vietnam’s Robusta coffee farmers have been unable to deliver between 150,000 and 200,000 tonnes of contract beans since the 2023-2024 harvest took place in October, according to estimates from seven traders compiled by Bloomberg.
The shipment amounted to just 10 to 13 percent of the harvest, according to Bloomberg calculations.
The cause is the El Niño phenomenon. El Niño events have raised global temperatures as they sweep across the globe every two to seven years.
This year, due to the influence of El Nino, warming and drying occurred across Vietnam, with the peak expected in November and December 2023. According to local news site VnExpressfueled by months of drought, threatens Vietnam’s ability to sustain demand for coffee.
Coffee beans require a tropical climate to grow, but optimal coffee growing conditions require daytime temperatures below 80 degrees and consistent rainfall to keep the soil rich. According to the National Oceanic and Atmospheric Administration.
For reference, last year’s maximum temperature in each province of Vietnam reached an astonishing 111 degrees due to El Niño.
According to Bloomberg, at a conference hosted by the Vietnam Coffee Association in Ho Chi Minh City earlier this month, Swiss food and beverage conglomerate Nestlé announced that it would be buying more supplies from Brazil, Indonesia and India to keep its global factories supplied. He said he needed to procure beans.
Intimex Group, Vietnam’s largest coffee exporter, also admitted during the conference that last year the country had to import about 200,000 tonnes of coffee beans itself, but this disappointing trend is expected to continue until 2024. in the process of.
“If the drought continues, we won’t have a lot of new beans to sell in the new season,” said Nguyen Gia Hue, who grows coffee on 6 hectares in Gia Lai province.
“We don’t have water on our farms,” he added, noting that some plants are infested with white mealybugs due to the heat, according to Bloomberg.
Drought caused by El Niño has reduced many lakes used to irrigate crops to severely low water levels.
