Bad weather in Vietnam could cause coffee headaches

Dire weather in areas of South East Asia has had a negative impact on the production of Vietnamese coffee beans an official said last week.

Vietnam is the world’s largest exporter of robusta beans – the variety of bean that is predominantly used in instant coffee.

There has been a cold snap that, combined with a period of drought, has seen the crop harvested for the 2013-14 period tumble by around 8% when compared to figures available for the 2012-13 season.

It’s not just the robusta beans either that have been affected: arabica beans numbers has also dropped due to continuing low temperatures throughout the northern-Vietnamese growing regions.

“The cold has severely hit coffee production in recent months,” Do Ha Nam, the Vice President of the Vietnam Coffee-Cocoa Association (VICOFA) said. “In the northwest province of Son La, 1,300 hectares of arabica coffee – more than 10% of its total – was [reported as] damaged.”

However, traders in the capital city of Ho Chi Minh City remained optimistic: “It’s dry season,” one told the AFP; “so you always have dry weather. It is completely normal.”

Yet if the rains stay away for another month or so, and drought-like conditions remain, then there is a chance for a serious decline in the production of coffee beans which would cause serious problems – potentially on a global scale.

In 2012, Vietnam exported just under 1.75 million tons of coffee, which was worth, roughly, $3.67 billion (£2.2bn). Current estimates put this year’s crop at around 1.37 million.

What happens in Vietnam will impact the rest of the world. Abah Ofon, a commodities analyst, said that if the nation’s “robusta output was constrained [then] that’s going to contribute to a more bullish environment.”

Robusta prices hit a nine-month high at the beginning of March and arabica saw a surge in which its value rose by nearly 60%.