Coffee prices start to surge in Vietnam amid a global shortage

Published Aug 9, 2021

Vietnam Robusta coffee price is spiking up due to the reduced supplies, and supply disruption caused by, COVID-19 outbreaks and shipping crisis across the world. The prices have increased by 23% in the last six months from USD 1.3 per kg to USD 1.6 per kg. Coffee exports are expected to continue dropping through September and witness a sign of recovery in November when the new harvest comes in.

There is a grave coffee shortage across the world after a major frost hit coffee plantations in Brazil. Global coffee consumers are seeking more supplies to fill the void left by limited production in Brazil by considering the next best alternative, Vietnam. Vietnam is one of the largest robusta coffee exporting countries with the primary market in Europe. The robusta coffee beans are used to make mass-market coffee products like instant coffee and low price coffee blends. The country witnessed a fall in coffee shipments during 2021 due to depleted coffee inventories, lockdowns due to the COVID-19 outbreak, and high logistic charges due to severe container shortages. There are still existing concerns regarding the outbreak of COVID-19 in the coming months which overlaps with the coffee harvesting months. Furthermore, there is an anticipation that coffee production in Vietnam will witness a decline due to low rainfall in the first six months of 2021. The average rainfall total across the Central Highlands, the main coffee-producing regions of Vietnam in June 2021 was just 174mm, 36% less than the rainfall recorded in the previous year.

A shortage of shipping containers in Asia has limited Vietnamese coffee exports during this season. Vietnam’s June coffee exports fell -13.8% year-over-year to 110,000 MT and cumulative Jan-Jun coffee exports fell -12.3% year-over-year to 825,000 MT. Increasing global shipping costs have discouraged importers from purchasing beans from Vietnam. Shipping a standard coffee container from Vietnam to Europe costs as much as USD 10,000 which is six to seven times more than the previous season.

Vietnam Robusta coffee price continues to spike up due to the reduced supplies from Vietnam, COVID-19 outbreaks, shipping crisis, and insufficient stock across the world. According to Catie Bui, Country Manager at Tridge, global coffee prices are still on the upswing and are expected to rise by another 25% in the coming week. This has also impacted the Vietnamese coffee price which has started to increase. In the last 6 months, coffee bean prices have increased from USD 1.3 per kg to 1.6 per kg. The inflating coffee prices are an outcome of the pandemic, limited stock, and ongoing shipping crisis. Coffee exports are expected to continue dropping through September and witness a sign of recovery in November when the new harvest comes in.