① As the heatwave sweeps through Southeast Asia, Vietnam's Robusta coffee production is under threat, and global coffee supply will be further tightened; ② According to the Vietnam Coffee Association, Vietnam's coffee exports are expected to drop 20% from 1.67 million tons in the same period last year.
Financial Services Association, March 26 (Editor Xia Junxiong) As the heatwave sweeps through Southeast Asia, Vietnam's Robusta coffee faces the threat of production cuts, and global coffee supply will be further tightened.
Vietnamese coffee trader Tuan Loc released a report saying, “Overall, coffee growing areas are hot and dry. Although we are still in the dry season, and this kind of weather is not unexpected, it is worth noting that rainfall has been low for 10 years and the temperature is too high.”
According to the Vietnam Coffee Association, it is expected that by September of this year, the end date of this fiscal year, Vietnam's coffee exports will drop 20% from 1.67 million tons in the same period last year.
Nguyen Nam Hai, chairman of the association, said that the last local harvest season is over, and coffee production may have decreased by 20% compared to 1.84 million tons the previous year. The decline exceeds previous estimates. The forecast for November last year will drop 10%.
Reasons for the decline in coffee production in Vietnam include climate change, lack of investment, and farmers switching to other crops. Hai notes that farmers' shift to other crops has a greater impact on yield.
Vietnam is the world's second-largest exporter of coffee and the largest producer of Robusta coffee. However, as some local farmers switch to more profitable crops such as durians and avocados, the area under coffee cultivation in Vietnam is shrinking.
Due to the decline in Vietnamese coffee production, the London Robusta coffee futures price has risen by more than 50% in the past year, reaching the highest level in at least 16 years.
The price of coffee in Vietnam has more than doubled compared to the same period last year, reaching a record level. Hai warned that he expects coffee prices to remain strong in May of this year, when Brazil and Indonesia will usher in the coffee harvest season.
Vietnam's coffee harvest later this year may not help ease supply constraints. Tuan Loc pointed out that since there may be a shortage of water resources in the next local irrigation cycle, farmers may prioritize more profitable crops such as irrigating durians in this case.
Frequent extreme high temperatures have become a common global problem, and Southeast Asia, which is located in the tropics, faces an even greater threat. Malaysia, another country on the Central South Peninsula, across the sea from Vietnam, is developing long-term countermeasures, including investing in heat-resistant crops.
Malaysian officials revealed that the country is cooperating with the UN Green Climate Fund to prepare to implement a new national adaptation plan starting in 2026.