World heads for fourth year of shortages for instant coffee beans

(May 23): Volcafe Ltd, one of the world’s top coffee traders, sees an “unprecedented” fourth year of deficits for robusta beans used in instant coffee, as top producer Vietnam continues to face dry weather. The crop potential for Vietnam in the 2024/25 season is seen at 24 million bags, the lowest in 13 years, according to a Volcafe report seen by Bloomberg. Poor rainfall in Vietnam has caused “irreversible damage” to coffee blossoms, while lower fertiliser use and the expansion of durian trees at the expense of coffee acreage have also weighed on production. Volcafe forecasts a global robusta deficit of 4.6 million bags in 2024/25, smaller than the nine-million-bag deficit seen in the previous season. Each bag of coffee is 60kg. Supply tightness has fuelled a robusta rally this year, with futures traded in London surging to a fresh intraday high above US$4,300 (RM20,232) in late April. Futures have since pared back, but “a solution to the current robusta deficit requires higher ...