Recently, according to media reports, several international coffee traders' feedback data currently show that in October Vietnam's coffee will enter the 2024/25 crop year, but Vietnam's coffee production is expected to decrease by 10% and may become the lowest level in nearly 10 years. In addition, due to reports of the return of La Nina, traders are concerned.

Currently, Vietnam is the world's second-largest coffee-producing country 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, which coincided with the early flowering stage of Vietnamese coffee, the impact was extremely serious, and Vietnamese coffee consequently saw a second consecutive year of reduced output. According to data from Vietnam's General Statistics Office, in the first 9 months of 2024 Vietnam exported a total of 1.1 million tonnes, 11.5% less than in the same period last year.

Therefore, experts estimate that this year's harvest may be 10% below the previous production target, and last month the international robusta coffee futures price, driven by drought and fires in Vietnam and Brazil as well as the EU's EUDR, reached its highest level in nearly half a century, at 5,572 USD/tonne.

Although Robusta coffee futures prices fell sharply recently, dropping to their lowest level in 6 weeks and currently standing at 4,701 USD/tonne. The main reason is that rain has begun in some parts of Brazil, especially the resumption of rainfall in Brazil's main Robusta region of Espirito Santo.

In addition, the European Commission's proposal to delay the launch of the EUDR by one year will be voted on at the plenary session on November 13. It is reported that of the 720 seats in the European Parliament, 401 seats are held by Members of the European Parliament (MEPs) from the European People's Party (EPP), the Progressive Alliance of Socialists and Democrats (S&D) and Renew Europe, and these three parties have clearly stated that they will vote in favour of the proposal to postpone the implementation of the EUDR by one year, so the proposal will very likely be delayed. As a result, European coffee traders have begun to slow down their purchasing.

According to the Vietnam Commodity Exchange, although Vietnam received rainfall at the end of May and rainfall increased, it is difficult to offset the adverse effects of the earlier drought, because some coffee trees withered and died during the drought, while other coffee trees that survived grew poorly due to lack of water and drought, and as a result yields are not high either. Therefore, the exchange is in agreement with the expectations of international traders that the 2024/25 crop season will see a 10% reduction in production.

Moreover, Vietnam has been reporting typhoon strikes for some time now. Earlier, in September, the super typhoon "Yagi" made landfall in northern Vietnam, causing severe damage, nearly 300 deaths and many missing, and is considered one of the strongest storms Vietnam has encountered in recent years. It also brought widespread rainfall and flooding, leading to landslides and mudslides and other disasters, affecting multiple industries and causing severe economic losses.

In addition, meteorological authorities say that in the coming months, rainfall in Southeast Asia may be higher than normal. This year Southeast Asia has already been hit by a series of storms, causing a range of damage to agriculture, tourism and industrial output in Vietnam and other countries, and the current increase in rainfall may further damage these industries.

In addition to the increase in rainfall, the climate will also become more humid, largely due to the developing La Nina phenomenon, which shifts warmer ocean water toward the western Pacific and brings more rainfall to Southeast Asia. In a recent analysis, experts from the World Meteorological Organization expect that in the second half of this year, there will be a 70% chance that La Nina will appear between October and November, and it may persist until January to March of next year, further threatening the globe. Due to severe weather, shipping problems and geopolitical issues, traders believe that until the end of 2024, coffee prices will continue to fluctuate,

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