Robusta prices are rising as a result of supply issues.

The Robusta price on ICE London was $2,299/ton at the close of the trading session on April 10, according to the Vietnam Commodity Exchange (MXV), up 20% from the price of $1,926/ton at the beginning of the year. Even yet, the price of this commodity has traded above $ 2,300 a ton, the highest in the previous seven months.
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Price changes for Robusta coffee commencing in 2023 (Unit: USD/ton; Source: Mercantile Exchange of Vietnam (MXV))

Director of the Vietnam Commodity News Center Pham Quang Anh stated: "The market worries about the lack of supply in providing nations have largely contributed to the quick spike in Robusta prices since the beginning of the year. However, the current high price is a boon for Vietnam's coffee exports.
Production forecasts in Brazil, the second largest exporter, have been slashed by 3.8% from 2022 to 17.5 million bags, according to data from the Government Crop Supply Authority (Conab).
The World Coffee Organization (ICO) has said that the global coffee market is likely to have a 7.27 million bag shortfall in the current crop year, with a 2.1% decrease in Robusta output compared to the previous year.
The fear of shrinking supply has made farmers in the major exporting countries become more cautious in deciding to boost supply to the market. In the meantime, the ICO forecasts that the growth rate of coffee consumption will be between one and two percent per year, driving the present market into a situation of scarcity and supporting the price increase.

Supply continues to be limited by competitors

Indonesia has started harvesting a fresh crop, with production expected to be at a nine-year low, pushing farmers to curtail exports. According to government data, the country exported 27,022 tons of coffee in the first two months of the year, a significant decrease from 37,666 tons in the same time in 2022.
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In Brazil, the situation is similar. Although the harvest has just begun, rainfall has unexpectedly returned to the Southeast region of Brazil and is forecasted to continue in April. This might benefit the growth of Arabica in Minas Gerais. At the same time, it hurts Espirito Santo's harvest, which is where most Robusta is produced.
Furthermore, growers are not optimistic about the coffee crop being harvested owing to bad weather at the start of the season, which has led output to being below potential. Farmers in the nation are reducing their supplies to the market as a result of forecasted lower yields.
As a result, even while the export market will pick up with the emergence of the two major suppliers, it won't represent a significant danger to Vietnam's export operations and even be advantageous given the current economic crisis, in which farmers worry about the possibility of poor output.

Top 5 nations that produce the greatest amount of robusta in the world (Source: Mercantile Exchange of Vietnam (MXV))

Vietnam seizes the opportunity to maintain supply record

Despite the unstable global economic environment, particularly in light of recent macro swings, economists are optimistic about the future of the Robusta market.
Compared to Arabica, another popular coffee type with a more sophisticated taste but a higher price, Robusta has various benefits in the competition for consumer market share.
Recent coffee export data from Vietnam, the world's leading supplier with 36% of worldwide production, partially show the increase of Robusta. According to preliminary figures from the General Department of Customs, Vietnam exported 210,372 tons of coffee in March, up 5.2% month over month and more than the 142,544 tons it shipped in January.
Despite a tiny 0.12% decline in export statistics during the last month compared to the same time in 2018, the turnover increased significantly, rising to 482.4 million USD from 474.4 million USD in March/March 2022. This suggests that our nation can now benefit from a pricing advantage.

Vietnam's monthly coffee exports (Unit: Thousand tons, Source: Mercantile Exchange of Vietnam (MXV))

“When demand growth is consistent and there are two direct rivals who continue to produce at a low level, Vietnam may benefit from high pricing, which ranges from 49,300 to 49,800 VND/kg, with dual support to increase export operations. This is a chance for Vietnam to continue its record-breaking $4 million annual export turnover for the coffee sector in 2022," said Mr. Pham Quang Anh.
Vietnam thus has a fantastic potential to maintain its dominance as the world's top Robusta supplier and surpass the previous record for coffee export turnover. The expansion of the coffee business and the interests of domestic exporters both need the promotion of exports at this time.
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