Coffee hoarding and heavy rain crimp supply of Vietnamese beans

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(Bloomberg) — Vietnam’s coffee supply has been squeezed by growers hoarding their beans and a delay to harvesting caused by heavy rain, but the disruption in the world’s top producer of robusta is expected to be short-lived.

Some farmers are waiting for higher domestic prices before selling, while rain has delayed the harvest by about 15 days, said Nguyen Nam Hai, the chairman of the Vietnam Coffee and Cocoa Association, known as Vicofa. A series of storms hit the region just as the harvest started in October.

“I would expect supply to increase from late December,” Hai told Bloomberg News on Wednesday in Ho Chi Minh City. “Farmers may sell more ahead of the Lunar New Year holidays” at the end of January, he added.

Vietnamese farmers also hoarded their coffee beans during the previous harvest as they waited for higher local prices, which were significantly lower than what they are now. The domestic price, along with robusta futures in London, have rallied this year on concerns over supply.

Vietnam may produce about 28 million bags of coffee from the 2024-25 harvest, Vicofa said in a separate statement, an increase from previous estimates. That compares with 26.7 million bags in 2023-24.

Robusta is typically used for instant drinks and espressos.