(Bloomberg) Vietnam’s vast hoard of coffee beans is shrinking, a phenomenon that’s set to push rising global prices even higher. Stockpiles will halve by the end of September from a year earlier, according to the median estimate in a Bloomberg survey of traders. Output from Vietnam, the world’s largest robusta supplier and second-largest coffee producer, is also expected to drop in 2022-23. The dwindling reserves and poor harvest outlook come at a time when global coffee consumption is recovering from a virus-induced slump. Benchmark robusta prices have surged 17% from a 10-month low in the middle of July on supply worries from Brazil to Africa. Robusta, used by instant coffee makers including Nestle SA or as a blend in espressos, has been making a comeback. The variety, normally cheaper than arabica, is in strong demand as people look for alternatives to mitigate the impact of rising inflation. In Australia, known for its coffee snobbery, supermarket Coles Group Ltd. said its
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Despite its large coffee output, Vietnam only gains little from global coffee markets as the country mainly exports raw materials. To make use of its many free trade deals, the country’s coffee maker will have to up their game.