Coffee bean reserves in Vietnam shrinks, price soars higher

The vast hoard of coffee bean reserves in Vietnam is sinking, adding fuel to the crop’s soaring global prices.

According to a recent poll among traders, the stockpile is anticipated to halve by the end of September from a year earlier.

Also, the output of Vietnam, which is the world’s largest robusta supplier and the second-biggest coffee producer, is projected to drop in the crop year 2022/23.

The nation’s plunging reserves and poor harvest forecast come at a time when global coffee consumption is recuperating from a coronavirus-induced slump.

Furthemore, the availability of coffee beans in the region plummeted as shipments grew 17.00% to 1.13 million tons in January to July from a year earlier.

Accordingly, the benchmark robusta prices soared by 17.00% from its 10-month low in the middle of July brought by supply concerns in Brazil and Africa.

Consequently, the global coffee market is struggling with one its largest deficits following a drought and frost that slashed Brazilian production.

Subsequently, Columbia is trying to recuperate from crop-damaging storms while Honduras, Guatemala, and Nicaragua are running out supplies from their 2021/22 harvest.

In addition, it was reported that the next-season crop in Costa Rica is showing signs of stress. Also, the lingering drought in Uganda has cut robusta yields.

Fertilizer price increase

An analyst stated that Vietnamese coffee reserves could decline further if local farmers would hold onto beans in the hopes that prices would keep rising.

The crop’s harvest runs from October through early January every year. The Central Highlands, which is the main planting region, is forecasted to receive higher rainfall from October this year due to the La Niña weather pattern. This forecast is according to the National Weather Center data released in the fourth week of August.

The rain could further push coffee prices higher, disrupting the planted crops.

The slump in Vietnamese inventories pushed domestic robusta prices to a record high of $2.10 per kilogram in the third week of the month.