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Vietnam stockpiles decline sparks potential Robusta price increase

It is thought that Robusta prices may experience a surge, following news that stockpiles in Vietnam – the world's largest producer of this variety of beans – have declined 54 per cent.

This may prove to be a blow for roasters who rely on cheaper Robusta beans to create more cost-effective blends, by combining the variety with more expensive Arabica beans. 

In fact, the price for this latter variety has also soared by 68 per cent so far this year due to poor weather conditions in Brazil, the world's largest coffee producer, which is usually responsible for more than one-third of the world's total output, furthering the potential repercussions of this news.

According to estimates compiled by Bloomberg, unsold reserves in Vietnam dropped to just 390,000 metric tonnes at the end of last month, which is only about 23 per cent of the record 1.7 million-tonne stockpile reserve and considerably less than the 850,000 tonnes recorded for the week ending March 7th, which was a record for that time of year.  

At 11:01 GMT on Monday (May 12th), it was reported that Robusta futures were trading at $2,091(£1,242) per tonne on NYSE Liffe in London, while Arabica came in at $1.858 per pound on ICE Futures US in New York.

With stockpiles in such a significant contributor so notably down, this could end up boosting the price of Robusta by even more than the 24 per cent by which it has increased across the year so far. 

As a result of such information, it has been reported that wealthier farmers are holding onto stocks in order to capitalise on the highest prices possible. 

However, it is not only Robusta beans which are expected to experience the adverse effects of market repercussions due to poor stockpiles in Vietnam. 

As aforementioned, a severe drought in Brazil has dramatically affected coffee output for the South American country. According to a report from London-based trader Marex Spectron, the harvest for 2014-15 is expected to fall short of January's 55 million forecast to 49 millions bags, down from last year's total of 53.3 million.

In terms of global demand, this misses the mark by 7.1 million bags – a potential factor in driving prices up even further – which figures from the US Department of Agriculture suggest would be the greatest deficit since 2009-10.

The adverse weather conditions have not just affected the coffee trade. According to, the problem extends to other agricultural produce, such as sugar cane. The website reports how one of Brazil's biggest farm operators SLC Agricola expects its soybean and corn prospects to be affected.

It stated the problems caused by a lack of rainfall were particularly notable in the Bahia and Piaui areas in the north-east of the country, as well as Goias situated more towards the centre.