Fears grow for global coffee supplies after Vietnam tightens lockdown amid Covid outbreak

Restrictions in Ho Chi Minh city are disrupting supplies of arabica beans used to make instant coffee

Ben Chapman
Wednesday 01 September 2021 19:31
<p>The South East Asian country is the world’s second largest exporter of coffee </p>

The South East Asian country is the world’s second largest exporter of coffee

Global supplies of coffee are being put under further strain by a lockdown in Vietnam amid a rising number of Covid cases.

Vietnam's main export hub, Ho Chi Minh City is under travel restriction which have impacted shipments of robusta beans, the type most commonly used to make instant coffee and also in some blends of fresh ground coffee. Some coffee-growing areas in the country are also under restrictions.

The South East Asian country is the world's second largest exporter of coffee. The latest public health measures have added to existing problems with a shortage of shipping container space which has pushed up transport costs.

Brazil, the world’s largest producer of arabica beans used for premium coffee, has been hit by drought and frost this year, prompting fears that prices for consumers could be set to spike in the coming months.

The wholesale price of robusta beans has risen 50 per cent this year. However, costs are not always immediately passed on as many purchasers of coffee fix the price months in advance.

Calls from the Vietnam Coffee-Cocoa Association and other trade bodies to relax restrictions have so far been rebuffed by the Vietnamese government.

Vietnam was relatively unscathed by the early waves of Covid-19, with just 1,500 cases recorded in 2020 but the Delta variant has spread much more widely, taking the total number of known infections to more than 460,000.

The government imposed restrictions on Ho Chi Minh in June after an outbreak there and tightened them further in August.

Coffee is not the only product to be impacted by the lockdown. Manufacturers with bases in Vietnam including Nike and Adidas have also been affected.

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