The new production season reduces production by 10%! Vietnam is about to suffer La Niña phenomenon

Recently, according to media reports, there are a number of international coffee traders through feedback data show that in October will enter the 25th year of Vietnamese coffee, but coffee production in Vietnam is expected to decline by 10%, and may become the lowest level in nearly 10 years. And traders are worried about the return of the reported La Nina phenomenon.

At present, Vietnam is the world's second largest coffee producer and the largest grower of Robusta, but this year Vietnam suffered a very severe drought, the worst in nearly a decade. Especially during the period from March to May, when Vietnamese coffee was in its early bloom, the impact was very serious, and Vietnamese coffee production was reduced for the second year in a row. According to the Vietnam Bureau of Statistics, Vietnam exported 1.1 million tons in the first nine months of 2024, 11.5% less than the same period last year.

As a result, experts estimate that this year's harvest may be 10% less than the previous production target, and the international Robusta coffee futures price last month hit a nearly half-century high of US $5572 per ton due to drought and fires in Vietnam and Brazil, as well as the European Union's EUDR blessing.

In recent days, though, the price of Robusta coffee futures has fallen sharply, to its lowest level in six weeks and is now at $4701 a tonne. This is mainly due to the beginning of rain in some parts of Brazil, particularly in the main Robsta area of Esp í rito Santo.

In addition, the European Commission's proposal for an one-year launch of the EUDR will be voted on at a 14-member plenary meeting on November 13th. Of the 720 seats in the European Parliament, 401 are held by the European people's Party (EPP), the Union for Socialist and Democratic Progress (SSD) and members of Parliament for the revival of Europe (MEP). The three parties have made it clear that they will vote for a proposal to postpone the implementation of EUDR for one year, which will most likely be delayed. As a result, European coffee traders began to slow their purchases.

According to the Vietnam Commodity Exchange, although there was rainfall in Vietnam at the end of May, it was difficult to offset the adverse effects of the early drought, all because some coffee trees withered and died during the drought. while another part of the surviving coffee trees grew poorly due to lack of water and drought, resulting in low yields, so the exchange and international traders had the same expectations. 2024x25 production will be reduced by 10% in the production season.

Moreover, recently, Vietnam has been reported to be hit by typhoons. Earlier in September, Super Typhoon Capricorn made landfall in northern Vietnam, causing serious damage, leaving nearly 300 people dead and many missing. It is considered to be one of the strongest storms in Vietnam in recent years. It has also brought extensive rainfall and floods, resulting in landslides and landslides and other disasters, affecting many industries and causing serious economic losses.

In addition, the meteorological department said that rainfall in Southeast Asia is likely to be higher than normal in the coming months. Southeast Asia has been hit by a series of storms this year, causing a series of damage to agriculture, tourism and industrial output in countries such as Vietnam, and the current increase in rainfall is likely to further damage these industries.

In addition to the increase in rainfall, the climate will also be wetter, largely due to the emerging La Nina phenomenon, which moves warm water to the western Pacific, bringing more rain to Southeast Asia. According to a recent analysis by experts from the World Meteorological Organization, it is expected that there is a 70% chance that La Nina will occur between October and November in the second half of this year, and may last until January to March next year, further threatening the world. Due to bad weather, shipping problems and geopolitical problems, traders believe that coffee prices will continue to fluctuate until the end of 2024

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