Vietnam’s coffee production for the 2024-25 season is projected to fall below last year’s levels due to adverse weather conditions, exacerbating the global coffee supply deficit and contributing to the surge in coffee prices worldwide. This decline comes as other major coffee-producing nations also grapple with production challenges.
Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association (Vicofa), estimates that Vietnam, the world’s leading robusta coffee producer, will produce 26.5 million bags in the 2024-25 season. This figure is lower than the association’s previous December estimate and falls short of the 27 million bags produced in the 2023-24 season.
Coffee beans being harvested in Vietnam.
The global coffee market has experienced significant tightening due to harvest issues in key producing countries like Brazil. As a result, robusta coffee futures in London have skyrocketed by nearly 70% in the past year. According to Hai, drought has played a significant role in impacting Vietnam’s coffee crop. These comments were made during an interview at the Buon Ma Thuot Coffee Festival in Dak Lak province.
The International Coffee Organization (ICO) has also acknowledged the widespread supply shortage. Vanúsia Nogueira, executive director of the ICO, stated in an interview that the world is facing a coffee shortage due to numerous and intense weather events affecting growing regions globally, resulting in critically low stock levels.
Coffee beans being harvested in Vietnam.
Currently, Vietnam’s 2024-25 coffee harvest is nearing completion, and coffee trees are beginning to develop beans for the next season. Encouragingly, Hai noted that the flowering of coffee trees appears promising due to sufficient rainfall, potentially signaling a positive outlook for future coffee supply.
As of Wednesday, robusta coffee futures, primarily used in instant coffee and espressos, remained relatively stable at $5,550 per ton in London. However, arabica coffee futures, the premium beans preferred for specialty coffees, experienced a decline of up to 2.6% in New York. The contrasting price movements reflect the distinct market dynamics for these two coffee varieties.
Despite the current challenges, the positive signs of healthy coffee tree flowering in Vietnam offer a glimmer of hope for the global coffee market. Ample rainfall could pave the way for increased production in the coming season, potentially easing the tight supply situation and stabilizing prices. However, the extent to which this potential recovery materializes remains dependent on future weather patterns and other factors influencing global coffee production.
