Vietnam's Coffee Production Plunges 20% in 2023-2024, Straining Global Supply

The global coffee market is facing a significant challenge as Vietnam, the world's second-largest coffee producer and the top producer of robusta beans, has reported a 20% decline in coffee production for the 2023-2024 season. According to the Vietnam Commodity Exchange, the country's coffee output fell to 1.47 million tons, the lowest level in four years.

The drop in production is attributed to a severe drought that has impacted the Southeast Asian nation. This supply shortage has raised concerns in the market, leading to a surge in coffee prices. In the domestic Vietnamese market, the price of robusta coffee beans has spiked, with a 12,000 VND (approximately $0.50) increase per kilogram compared to the previous week, reaching 114,500 to 116,000 VND (around $4.90 to $5.00) per kilogram.

"The 2023-2024 season saw a 20% decline in Vietnam's coffee production, reaching a new four-year low of 1.47 million tons," said a representative from the Ministry of Agriculture and Rural Development. "This has put significant pressure on the global robusta coffee supply."

Vietnam is the world's largest producer of robusta coffee, a variety highly valued for its use in instant coffee and espresso blends. However, many Vietnamese farmers have shifted to cultivating other crops, such as durian, leading to a decrease in the country's coffee cultivation area and subsequently, the supply.

Despite the production challenges, Vietnam's coffee exports during the first quarter of 2024 reached nearly 799,000 tons, generating $1.9 billion in revenue. Experts anticipate that with the current export prices ranging from $3,500 to $4,000 per ton, Vietnam's coffee export value could reach $5 billion in 2024.

The global coffee market is closely watching the situation in Vietnam, as the supply shortage could have far-reaching implications for the industry. Coffee-producing countries and industry stakeholders are exploring strategies to mitigate the impact and ensure a stable supply to meet the growing worldwide demand for this beloved beverage.