Coffee lovers may need to buckle up amid the looming coffee price hikes as Vietnam’s vast coffee hoards shrink. The global coffee market is facing huge deficits, and key players in the coffee industry are battered by drought, heavy rainfalls, insufficient supply and shipping bottlenecks.

As opposed to production, global coffee consumption is increasing after a Covid-induced pause. According to projections, Vietnamese stockpiles will have been cut in half by the end of September compared to the same period a year earlier. “Carryover stockpiles are seen at 200,000 tons at the start of the new season on Oct. 1, compared with an estimated 400,000 tons a year earlier, according to the survey. “

Output from Vietnam is also expected to drop in 2022-23. Many producers abandoned coffee for more profitable fruit trees. The rising fertiliser prices will also affect production for the coming season, said Do Ha Nam, Intimex Group’s chairman and Vietnam Coffee and Cocoa Association’s deputy head.

Many producers tried to cut costs by using less fertiliser. Citigroup Inc. stated that such an approach “poses substantial risk to the prospect for the upcoming planting season.” It has already reduced its projection for coffee production in Vietnam for both this year and the next.

The harvest in Vietnam runs from October to early January. It is projected that some coffee-growing regions might receive heavier rainfall in three months from October due to the La Niña weather pattern.

As a result, stocks are decreasing. When shipments of Vietnamese Robusta rose 17%, its availability declined. Many traders are worried, and some fear that producers may hold their coffee back in hopes that the prices increase further. Robusta’s current price in Dak Lak province rose to a record high of $2.10/kg last week.

In spite of the widely accepted opinion that Arabica is the superior bean, Robusta has been gaining in popularity as people search for cheaper alternatives to Arabica due to rising prices. Companies such as Nestle, Jacobs and others use lower-quality robusta beans for their instant coffee or as a base for espresso blends.

Photo from Atalayar

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