Why is the epidemic in Vietnam so serious that the price of Robusta coffee soared by 50% due to the ban in Vietnam?

Since 2020, the COVID-19 epidemic has begun to spread all over the world. In January 2020, Vietnam found that the first case of COVID-19 infection began to strictly inspect all inbound flights in just seven days, and later even suspended classes indefinitely. Under this high standard of epidemic prevention measures, Vietnam successfully brought the epidemic under control and ranked second on the list of the most successful countries for epidemic prevention in 2020 released by the Loy Institute in Australia.

However, the good times did not last long. In 2021, the COVID-19 epidemic in Vietnam collapsed.

Step up epidemic prevention measures

According to Vietnamese state media, in the early morning of August 23, regular units of the Vietnamese people's Army and mobile police units directly under the Vietnamese Ministry of Public Security took over a total of 312 checkpoints in Ho Chi Minh City, marking the entry into military control of Ho Chi Minh City, Vietnam's largest city and economic center.

Trade, transport and tourism have been hit hard

According to the Vietnam Statistics General Administration, with the increasingly serious situation of the COVID-19 epidemic in Vietnam, social distance measures have been implemented in many parts of the country in accordance with the instructions of the Prime Minister No. 16, resulting in a serious impact on Vietnam's trade, transport and tourism.

In August 2021, total retail sales of consumer goods and total operating income of the service industry in Vietnam decreased by 10.5% from the previous year, down 33.7% from the same period last year; passenger volume was 60.7 million, down 75.9% from the same period last year; freight volume was 91.1 million tons, down 39.3% from the same period last year; the number of international tourists was 9300, up 24.4% from the previous month and down 43% from the same period last year.

Vietnam's Robusta export encounters difficulties

Vietnam is the second largest coffee producer in the world and the largest coffee producer in Robusta. Due to the increase in the number of confirmed cases and the shortage of vaccines, the local government has further tightened restrictions, including a travel ban on the country's producing areas.

The blockade in the southeastern city of Ho Chi Minh means it is more difficult for Vietnamese exporters to ship goods, including coffee beans, to the rest of the world. In addition to the existing severe shortage of containers and soaring freight rates, the travel ban poses another challenge for exporters.

Robusta's prices have risen nearly 50% since the start of the year. The futures price of Robusta coffee soared to $2024 a tonne, the highest level in four years, CNN Business reported on Aug. 30.

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