As climate change increasingly disrupts agricultural practices, the global coffee industry faces significant challenges, with serious implications for coffee drinkers worldwide.
Vietnam, the world’s second-largest coffee producer and the leading supplier of robusta beans used in instant coffee, is currently grappling with a severe drought. This environmental crisis is expected to reduce the country’s coffee exports by 20% this year, driving robusta futures to record highs.
Coffee is vital to Vietnam’s economy, contributing over 10% of its agricultural export revenues and 3% of its gross domestic product. Last year, Vietnam exported 1.61 million tonnes of coffee, earning an unprecedented $4.18 billion.
While Europe dominates the higher-value processed coffee market, poorer countries primarily engage in the less profitable unprocessed coffee market. Brazil, Colombia, Indonesia, and Ethiopia, along with Vietnam, collectively account for 70% of this sector. For these Global South nations, coffee exports are crucial for economic stability.
The drought in Vietnam highlights the vulnerability of coffee production to climate change. Brazil, responsible for 40% of the world’s coffee, experienced a 20% crop loss in 2021 due to frost and drought. Similarly, Indonesia’s robusta output dropped by 20% last year due to El Niño, a weather pattern that has only recently begun to subside.
While countries like Peru and Uganda have attempted to fill the production gaps, the economic repercussions for major producers like Indonesia and Vietnam are significant.
Beyond drought and excessive rainfall, rising temperatures are exacerbating the problem by increasing the prevalence of insect pests and diseases, which diminish both the quality and yield of coffee crops. Moreover, the land suitable for coffee cultivation is shrinking.
According to World Coffee Research, the world may face a shortage of up to 35 million 60kg bags of robusta coffee by 2040 due to climate change and evolving consumption trends. By 2050, half of the land currently suitable for growing arabica coffee will no longer be viable, further straining global coffee production and leading to higher prices.
As climate change continues to alter agricultural conditions, the future of coffee production remains uncertain, posing a threat to economies dependent on coffee exports and to coffee drinkers worldwide.