Asia

VIETNAM Vietnam, coffee production falls. World supply in danger

Vietnam is the second largest producer in the world, but it is estimated that next year the harvest will be reduced. Raw material is scarce and stocks of Robusta grade are about to be halved. On the other hand, the increase in the value of exports continues: from 2,240 million euros in 2020 to more than three billion last year.

Ho Chi Minh City () – The drop in production that has been taking place for some time in the world’s second largest supplier of coffee, and which is likely to worsen next year, threatens to put a global crisis in a trade already marked by the scarcity of the product due to the decrease in harvests and the reduction of reserves. Vietnamese producers indicate a strong concern about one of the biggest shortages of the product in recent times. And if the coffee stored is on track to be halved in the coming weeks compared to the usual quantities, the price of Robusta quality, the main one destined for export, has already reached record levels. This lower availability was also affected by a 17% increase in exports between January and July compared to the same period in 2021, which was necessary to ensure an essential supply in the global market and prevent further overheating of prices.

The world’s second largest producer after Brazil and firmly in the top five for coffee exports, unlike other strong producers, Vietnam has a large domestic market, which – with annual per capita consumption estimated by the World Bank at 0. 5 kilograms – in 2021 absorbed about 10% of the total production of 700-800 thousand tons. This quantity has grown spectacularly over time, going from 6,000 tons produced in 1975 to 1,650,000 in 2016 with a fluctuating result in subsequent periods.

Although production has dropped considerably, offset in part by the strong appreciation of the Robusta quality, the value of exports has continued its rise, going from €2.24 billion in 2020 to more than €3 billion last year. A figure equivalent to 10% of all agricultural exports and 3% of the Gross Domestic Product (GDP) of Vietnam.

The placing on the market of 30.2 million bags for the year 2020-2021, 3.5% less than the previous business year, was in any case better than the forecasts for the reduction in production and exports of other producing countries. In any case, an unsustainable situation in a world situation that is already difficult due to climatic conditions, high transport costs and economic difficulties, which threatens to reduce the perspectives indicated last year by the Vietnam Coffee – Cocoa Association, according to which the commercialization of coffee would reach 5-6 billion by 2030 under the motto of “productivity, quality, added value”.



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