Fears grow over global coffee supply after Vietnam tightens lockdown amid Covid outbreak Business News

Global coffee supplies are further strained by a lockdown in Vietnam amid a growing number of Covid cases.

Vietnam’s main export hub, Ho Chi Minh City, is subject to travel restrictions, which has impacted shipments of Robusta beans, the type most commonly used to make instant coffee and also in certain blends of fresh ground coffee. Some coffee growing areas of the country are also subject to restrictions.

The Southeast Asian country is the world’s second largest exporter of coffee. The latest public health measures have exacerbated existing problems with a lack of space for sea containers, 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, raising fears that prices for consumers will skyrocket in the coming months. .

The wholesale price of Robusta beans has increased by 50% this year. However, the costs are not always immediately passed on as many coffee buyers fix the price months in advance.

Calls by the Vietnamese Coffee and Cocoa Association and other trade bodies to ease restrictions have so far been rejected by the Vietnamese government.

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

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

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

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This notice was published: 2021-09-01 18:31:56

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