Dry Conditions Fuel Record-High Robusta Coffee Prices in Vietnam, Threatening Global Wheat Supplies and Food Costs

Robusta coffee futures continued to rise in response to persistent dry conditions in Vietnam, the world’s largest producer of the bean. While sporadic rainfall has offered brief respite in certain regions, experts warn that significantly more precipitation is required to alleviate the ongoing drought. In fact, about 40% of the coffee plants in Dak Lak province, a key growing area representing around one third of Vietnam’s output, have gone without adequate hydration, with total rainfall in the region this month reportedly 50% lower than figures recorded during the same period last year. This news follows a steep drop in London futures, triggered by recent rainfall in cultivation zones. Prices for robusta, commonly utilized in espresso blends and instant coffee, hit their highest point in 45 years in April due to a supply shortage resulting from a lack of rain in Vietnam. The current state of affairs has prompted analysts to raise concerns regarding the future of global wheat supplies and the potential for rising food costs, given that other major crops such as cocoa and coffee have also experienced an upward trend in price this year. Despite recent rainfall, industry insiders stress that “dry conditions remain a concern.”