COVID Lockdowns Stymie Vietnamese Robusta Exports

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The global coffee supply is taking another blow. After unexpected frosts hampered Arabica production across Brazil – with some regions expecting yield losses of up to 20% – the Robusta market appears to be facing similar shortages due to COVID, this time in Vietnam.

As the Financial Times reported, Vietnam, the world’s largest exporter of Robusta and the second largest producer of coffee behind Brazil, is facing problems getting its coffee out of the country and getting it to market. The country, which did not have its first day with more than 100 new cases until May of this year and their first day with more than 1,000 until July, managed to avoid any outbreak of COVID during the first year and a half of the pandemic thanks to strict monitoring and containment measures, is now under siege by the Delta variant, with new daily cases numbering around 15,000.

An increase in infections coupled with a shortage of vaccines has led the government to further tighten restrictions, including imposing travel bans in production areas of the country. With no way to access the coffee plantation, Vietnamese exporters have no way of getting their hands on the crops. “There are great concerns that you may not be able to transport your coffee out of the country,” Carlos Mera of Rabobank told the Financial Times.

This led the price of Robusta in the futures market to surge significantly, hitting a four-year high on Friday at a price of $ 2,043 per tonne. This increase of almost 50% since the start of the year mimics the increase in Arabica prices due to the expected shortage from Brazil. According to the Financial Times, this has led many analysts to start “lowering earnings forecasts for some companies.”

Zac Cadwalader is editor-in-chief of Sprudge Media Network and editor-in-chief based in Dallas. Read more Zac Cadwalader on Sprudge.



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