Expectations that an influx of coffee exports from Asia’s leading producers could alleviate surging robusta prices, which have reached their highest levels since the 1970s, are diminishing. Vietnam, which accounts for approximately one-third of global robusta supply primarily used for instant coffee and espresso blends, has been severely affected by extreme weather. A drought followed by heavy rains has hit the country’s coffee-growing regions just ahead of the October harvest, resulting in a projected 10 to 15 percent decrease in yield, according to Trinh Duc Minh, chairman of the Buon Ma Thuot Coffee Association.
Minh noted that the drought has led to smaller bean production, while the excessive rain complicates the harvesting and drying processes, as well as transport logistics. The U.S. Department of Agriculture (USDA) reports that over 95 percent of Vietnam’s coffee output next season will be robusta. The escalating demand for instant coffee and adverse weather conditions have contributed to a more than doubling of robusta prices in the past year, nearing the cost of arabica, which has also seen significant price increases. Volcafe, a prominent coffee trader, anticipates a global robusta deficit for the 2024/25 season, marking the fourth consecutive annual shortfall.
In Indonesia, which produces around 10 percent of the world’s robusta, domestic consumption rather than weather issues is expected to limit relief in global markets. While output is projected to increase by 14 percent in 2024 to 10 million 60kg bags, exports are anticipated to remain steady at approximately 250,000 tonnes due to rising local demand, according to Moelyono Soesilo, head of the Association of Indonesian Coffee Exporters and Industries.
The amount of land allocated for coffee cultivation in Vietnam has been decreasing as farmers transition to alternative crops such as durian and avocados. Long-term challenges include reduced groundwater and shade, vital for irrigation and evaporation control. Although the USDA forecasted only a 1 percent drop in Vietnamese robusta production for 2024/25 to 27.85 million 60kg bags, this reflects a nearly 9 percent decline from the 2021/22 season, highlighting a longer-term downward trend amid growing global demand.
Robusta’s resilience to heat and disease compared to arabica positions it for increased market share, though both varieties face significant climate risks. This trend spells continued challenges for coffee consumers, who can expect elevated prices in the foreseeable future. Additionally, the coffee belt in Vietnam is facing increased rainfall following Typhoon Yagi’s landfall on September 7, delaying typical shipments that start in early November to potentially early December or later, according to Daryl Kryst, assistant vice-president at StoneX commodities brokerage. While some easing in robusta prices is anticipated, it may not materialize until early next year.