Brewing Storm: World's Top Robusta Coffee Producer Reports Smallest Export Since 2009

More troubling news is brewing for coffee lovers from the world’s top-producing country in Southeast Asia.

New export data reveals a sharp decline in robusta beans, commonly used in instant coffee and espresso and as a filler in various ground coffee blends. This development is part of a broader trend of tightening global supplies and soaring bean prices, exacerbating food inflation and hitting cash-strapped working poor consumers.

Bloomberg data shows Vietnam’s coffee exports plunged to the smallest volume in at least 15 years in May. Low exports are expected to persist for several months, which will only pressure prices higher. 

Shipments from the world’s biggest producer of the robusta variety slumped to less than 80,000 tons in May, down 47% from a year ago, customs data show. That’s the lowest amount of beans exported for the month since 2009. -Bloomberg

Do Ha Nam, chairman of top shipper Intimex Group and deputy head of the Vietnam Coffee Cocoa Association, said monthly export data would be “insignificant” until the harvest of new beans begins in October. He warned stockpiles are quickly being depleted by farmers. 

Tightening global supplies have rocketed robusta futures in London to the highest in 16 years. 

About a third of the world’s robusta beans come from Vietnam.

Companies, such as J.M. Smucker Co., whose brands include Folgers, Dunkin’, Café Bustelo, Pilon, and Medaglia d’Oro, recently warned of imminent price hikes across its brands due to the surge in bean prices. 

The coffee category continues to experience commodity volatility and overall meaningful inflation. In response to recent higher green coffee costs that we will begin to incur during the first quarter, we are taking a list price increase across parts of our portfolio in early June. As always, we will continue to manage our coffee business through a strategy that demonstrates a balance between recovering inflationary input costs, while providing consumers with attractive options ranging from value to premium.

Translation: Supermarket prices for coffee, especially J.M. Smucker’s brands, are set to move higher, if not already, thus raising food inflation for consumers.

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Originally Posted at; https://www.zerohedge.com//