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Covid-19 threatens to cause global coffee shortage as major export hub goes into lockdown

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  • Vietnam's Covid-19 measures are dwindling exports of coffee to the rest of the world.
  • Brazil, another major exporter, has struggled with both drought and frost, damaging their coffee harvest.
  • The world is facing the potential for a major coffee shortage.
  • For more stories go to www.BusinessInsider.co.za.

Concerns for a global coffee shortage are growing after Covid-19 lockdowns in Vietnam have lead to supply chain disruptions, the BBC report.

Ho Chi Minh city - which includes a port and is a large exporting hub - has been locked down to control the aggressive Delta variant.

As a result, exporters are now finding it much harder to transport coffee beans to ports to enable global distribution, with prices soaring and shipment delays ever-threatening, according to Bloomberg.

"There are big worries that you may not be able to transport your coffee out of the country," said Carlos Mera, an analyst at Rabobank, told the Financial Times.

According to the UN, Vietnam, the world's second-largest producer of coffee, is a major producer and exporter of robusta - a bitter-tasting coffee bean used predominantly in instant coffee and some espresso blends.

The Vietnam Coffee-Cocoa Association is now petitioning the Government to ease some of the restrictions, which they say cause delays, raise costs, and put shippers at risk of having to compensate buyers for late delivery, Bloomberg report.

As a result, the Guardian reports that Vietnamese Transport Minister Nguyen Van has ordered the authorities in Southern Vietnam to help clear the way for easier transportation of goods - including coffee and rice.

The global coffee supply was already threatened by an unseasonably dry harvest in Brazil, another major global exporter of coffee.

Ibi Idoniboye, a senior market analyst for Mintec, told The Guardian: "At the start of the flowering season in Brazil for this year - for the 2021-22 crop, which is currently harvesting - there was a lot of drought, so the trees were under a lot of stress and weren't able to produce efficiently. So you're already seeing lower production."

But, this year - which will yield the crops for next year - has seen huge frosts in Brazil, further threatening the coffee supply for the next year.

The BBC report that these frosts have shot the price of coffee to the highest level seen in almost seven years.

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