Farmers’ shift to durian pushes up coffee prices

Coffee prices have rallied sharply so far this year, with the nearest-futures July robusta coffee reaching a historic peak of over $4,200 late last month, according to market data provider Barchart.

One of the primary drivers behind the spike in global coffee prices is the constrained robusta supply from Vietnam, which has been dwindling due to drought and the shift from the brown bean, Nikkei Asia reported.

Many farmers in the country have switched from coffee to durian, spurred by the fruit's burgeoning popularity in China, where Vietnam stands as the top exporter of the spiky fruit.

Vietnam’s durian exports totaled $2.3 billion last year, 87% of which were to China, and are expected to reach $3.5 billion this year.

The transition to durian, coupled with efforts to curb deforestation in the nation, has made it challenging to find land suitable for coffee cultivation, consequently impacting supply.

Additionally, Vietnam's coffee production is suffering from droughts exacerbated by the El Nino phenomenon, as reported by Business Insider.

In March, the Vietnam Coffee Cocoa Association warned that coffee exports in the twelve months leading up to September might plummet by up to 20% from the previous year.

Another factor contributing to the rise in coffee prices is higher consumption in Asian countries.

Coffee consumption in the Asia-Pacific region surged to 44.5 million bags from October 2022 to September 2023, up 12% from the preceding four years and accounting for over 25% of the global coffee consumption.

In contrast, the world’s total coffee consumption experienced a mere 1% growth during the same period.