Vietnam lockdown adds to global coffee supply chain woes – reports

An extended lockdown of Vietnam’s largest city and exporting hub – Ho Chi Minh – is threatening to cause a major headache for global supplies of coffee, according to reports in the Financial Times.

The country is a leading producer of robusta, the bean used in instant coffee and in some blends of espresso.

The lockdown in the city has seen exporters struggle to transport goods to ports for shipment abroad, compounding existing supply chain problems relating to a shortage of shipping containers and increasing freight costs.

It’s spelled trouble for coffee producers and vendors, as wholesale robusta bean prices have risen by around 50 per cent globally this year alone.

Trade organisations, including the Vietnam Coffee-Cocoa Association, have called on the country’s Government to ease restrictions to help avoid delays related to shipments and related costs.

The problems in Vietnam are only the most recent blow to the global coffee industry, however.

In the world’s largest producer of premium arabica coffee beans – Brazil, crop yields have been badly impacted by adverse weather conditions.

The worst frosts in the country in decades have sent coffee costs spiraling and the damage may be so severe it has a longer-term impact, forcing farmers to pause production to replant trees.

It comes as earlier this year warnings were sounded that climate-related changes could disrupt European coffee and chocolate supplies, as supplier countries, including Brazil and Vietnam are particularly vulnerable to droughts.