Analysts and weather experts have indicated that the anticipated global weather pattern known as El Niño poses a greater threat to robusta coffee productio.
El Niño, which disrupts rainfall and temperature patterns, could potentially lead to supply constraints and price increases for robusta coffee. Robusta, known for its higher caffeine content and predominant use in instant coffee, could face yield losses in the world’s top two robusta-producing countries, Vietnam and Brazil, if a strong El Niño materializes.
The recent surge in robusta prices to a 15-year high is attributed to tight supply and concerns about future production amid the possibility of El Niño.
Fernando Maximiliano, a coffee analyst at broker StoneX, pointed out that during a previous strong El Niño episode between 2015 and 2016, which caused a drought in Brazil’s Espirito Santo state, robusta coffee production in Brazil plummeted by nearly 40%.
The Output of the robusta coffee crop will largely depend on the severity of the anticipated dry weather associated with El Niño.
Vietnam’s National Centre for Hydro-Meteorological Forecast has predicted a 70% to 80% likelihood of El Niño developing in mid-2023 and persisting into 2024. The institution also expects record-high temperatures in the country during that period.
In contrast, the risks for arabica coffee, the preferred variety in high-end cafes, appear to be comparatively lower.
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