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Vietnam, the top Robusta exporter in lockdown affecting global supply

Vietnam, the top Robusta exporter in lockdown affecting global supply

September 4 - 2021 Coffee Geography Magazine

The government of Vietnam put major cities in the country under lockdown to control the spread of Covid 19 which creates concerns over global supplies of coffee.

The delta variant of the virus is shown in fast surge in many areas of the country mainly the exporting port city, Ho Chi Minh.

Vietnam as a main supplier of robusta coffee beans to the European market, its product is preferred over the Brazlian for instant coffee and some espresso blends.

Due to Brazilian coffee shortfall, robusta prices have risen by 50% so far this year.

The lockdown of the city of Ho Chi Minh means Vietnam's exporters are struggling to transport coffee beans to ports for shipment around the world. The Vietnam Coffee-Cocoa Association called on the country's government to ease the restrictions to help avoid further delays to shipments and related costs.

vietnam lockdown

The issues faced by Vietnamese producers are just the latest problem to hit the coffee industry. Brazil, the world's biggest producer of the premium arabica coffee beans, has seen its crops impacted by drought and frosts.

Coffee production has been a major source of income for Vietnam since the early 20th century. First introduced by the French in 1857, the Vietnamese coffee industry developed through the plantation system, becoming a major economic force in the country.

The Vietnamese coffee industry now employs 2.6 million people with production capacity second to only Brazil with its 61.7 million bags. Coffee has become Vietnam’s second most important crop by volume after rice and is the most important by value.

The production in Vietnam accounting for more than 90% of Vietnam’s total output has an average annual turnover of around US$3 billion each year, equivalent to over 10% of Vietnam’s agricultural exports. However, predicted challenges from growing areas on a global scale, negative impacts of climate change and other increasing risks and externalities, Vietnam is working hard towards greater coffee sustainability, adapting production models and further developing best production practices at all segments in the coffee value chain nationally and regionally to increase resilience against the climate change and provide economic certainty to smallholder producers.

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