Drought in Vietnam further tightens Robusta supply

Vietnam’s worst drought in 30 years has led to predictions of the nation’s lowest Robusta crop in four years in 2016/17. Higher average temperatures and scarce rainfall mean that the world’s leading Robusta-producing region, Vietnam’s Central Highlands, looks set to yield its lowest crop since 2012/13 in the October harvest. It is predicted that Vietnam’s Robusta output for 2016/17 will be 1.5 million tonnes, down from 1.65 million tonnes in the last harvest. This comes on the back of news of a drop in Brazil’s Robusta production to 12.6 million bags, 4.4 million bags below the country’s four-year average. The tightening supply has seen the ICE Futures Europe price of Robusta reach a high of US$1,665 per tonne in recent days.