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Tuesday, October 22, 2024

Why Vietnam drought may spike global espresso prices

Gia Lai Province – Vietnam’s Coffee Growers Face Challenges Amidst Drought

Vietnam, the world’s second largest coffee producer and the top producer of robusta beans, is facing a tough year due to the worst drought in nearly a decade. This has had a significant impact on the country’s coffee industry, which could result in a rise in the cost of everyone’s morning espresso.

The central Gia Lai province, known for its vast coffee plantations, has been hit hard by the drought. Doan Van Thang, a 39-year-old coffee farmer from the province, shared his experience, “The drought has dried up the entire area and surrounding regions, causing severe water shortages. Compared to last year, the harvest of coffee cherries has significantly decreased, resulting in a major loss of output.”

As the price of coffee beans reaches a record high, farmers are reaping the benefits of this increase in demand. However, they are also facing the challenges of protecting their crops from the extreme heat. To combat this, they have adopted new tactics such as allowing the trees to grow for longer periods, giving their roots access to deeper water reserves. Additionally, they have been softening the soil around the plants and covering it with leaves to improve the absorption of rainwater and fertilizers.

Fortunately, recent rainfall has brought some relief and improved the outlook for coffee growers. This has given them a sense of confidence and hope for the upcoming harvest. However, it is uncertain whether these improved weather conditions and farming practices will be enough to boost output and bring down the prices of robusta beans.

Doan Van Thang expressed his mixed feelings about the situation, “As farmers, we should be happy about the increase in prices, but due to the drought, we are not as happy as we should be. We are facing a decrease in output, which is a cause of concern for us. The erratic changes in climate make it difficult for us to adapt, and we are more sad than happy because of the significant decrease in output compared to previous years.”

While domestic projections have been pessimistic, the United States Department of Agriculture has estimated that Vietnam’s next harvest will remain steady. However, regardless of the impact on the harvest, the cost of coffee for consumers around the world is likely to increase. Record wholesale prices have not yet affected consumer prices, but there are signs that this may change.

According to recent data from Eurostat, coffee inflation in the European Union has risen by 1.6% in April and 2.5% in Italy, a country known for its love for robusta coffee. Although these numbers are still lower than the price increases from the previous year, they are higher than the March EU reading, indicating that coffee roasters may have started to pass on their higher costs to consumers.

Despite the challenges faced by coffee growers in Vietnam, there is still hope for a successful harvest and a positive outcome for both farmers and consumers. The resilience and determination of these farmers, along with the support from officials and favorable weather conditions, will play a crucial role in overcoming this year’s difficulties. Let us continue to support and appreciate the hard work of Vietnam’s coffee growers, who provide us with our daily dose of morning caffeine.

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