The covid situation affecting coffee prices in Vietnam
According to Fitch Solutions, Vietnam’s Covid lockdown forced the global supply of coffee, and its prices to be high that might remain until 2022.
Vietnam is the world’s second-largest coffee exporter. The Southeast Asian country has been struggling with its worst Covid outbreak since the beginning of the pandemic. The lockdown has affected shipments of goods, including coffee.
According to customs data reported by Reuters, in August, coffee exports fell 8.6% from July to 111,698 tonnes in Vietnam. From the beginning of the year to August, Vietnam exported around 1.2 million tonnes of coffee which seems 6.5% lower than a year ago. However, according to the news agency, coffee export revenue increased 3% to approximately $2.1 billion.
The country’s exports and production drops in other producers boosted coffee prices worldwide. According to Refinitiv data, Benchmark arabica coffee futures plunged by around 45.9% this year, while robusta futures climbed 52.3%.
Brazil, which is considered the world’s largest coffee producer, experienced weather changes that damaged its crops. Bad weather also affected the harvest season in Colombia. The emergence of the new coronavirus variant in Colombia might also lead to increased restrictions and shortages in labor. According to Fitch Solutions’ statement last week, all of these events will worsen production. It added that at the same time, the demand in the west would increase in the following months as the Covid-19 restrictions would allow coffee shops to open again.
Covid in Vietnam
According to data compiled by Johns Hopkins University, Vietnam reported only 1,466 Covid cases and 36 deaths last year while it shares the border with China. But as of Tuesday, its cumulative cases grew dramatically to more than 636,000 with over 15,800 deaths.
Like many Southeast Asian countries, Vietnam has difficulty containing the highly infectious new variants of Covid. Official statistics showed that only 5.8% of its population is fully vaccinated.
The post The covid situation affecting coffee prices in Vietnam appeared first on FinanceBrokerage.