Ups and Downs for the Coffee Trade in Vietnam, a Growing Country

As a crop, coffee has been grown in Viet Nam for quite some time. In fact, the country is currently the world’s largest producer of Robusto coffee beans. But in 2016, the weather has brought significant challenges to coffee bean farming in the country, while export deals are primed to set records.

Where history is concerned, 2016 may go down as one of the most impactful years for the coffee growing industry in Vietnam. Here’s a quick peak at some of the highlights and lowlights of the year for Vietnamese coffee growers, processors, and exporters.

El Nino Affects the Coffee Crops in Vietnam

In El Nino years, like in many other places around the Pacific, the weather in Viet Nam becomes at best, unpredictable. Vietnamese coffee growers have faced a challenging drought up until recent weeks when nature turned on the spigot and drenched the country’s coffee growing regions with seemingly relentless storms, dampening Vietnamese farmers hopes for a solid Robusto crop this year.

The Vietnamese Robusto crop is expected to be harvested in November, with yields totaling roughly ninety percent of last year’s crop. This turn of events is hardly unexpected, but still has many speculators and coffee traders keeping a keen eye on supply and demand.

To say the least, coffee prices will be volatile for the current year’s crop. Furthermore, changing weather patterns make it unlikely that this will be the last substandard yield for the country.

Pricing of Vietnamese Coffee

Lack of supply and increasing global demand for both Robusto and Arabica beans will most likely drive export and commodity prices higher for Viet Nam’s coffee crop. One country hoping to benefit from this state of affairs is India. India produces a significant amount of Robusto coffee as well, but the country’s exports of coffee have been down in recent years due to commodity prices, weather in India, and a variety of other related issues.

Exports of Coffee Coming from Vietnam

Despite the gloom surrounding the weather and the coming coffee harvest, Viet Nam is still positioned to benefit massively from direct trade with the United Kingdom. Vietnam currently exports nearly ninety percent of its coffee harvest, generating approximately three billion dollars in U.S. currency each year. While the remaining ten percent of the harvest is consumed by the growing domestic market, most of the export crop is processed as instant coffee for consumption in the U.S. and the UK.

The Ever-Evolving Market for Vietnamese Coffee Exports

Despite the multi-year drought and other El Nino-caused weather issues, Vietnam is still producing a considerable percentage of the world’s coffee. 2016 had its challenges for Vietnam’s coffee growers, but in the end, exports will remain robust for the country.