Extreme weather conditions due to El Nino are fueling concerns that robusta coffee beans in major producers like Vietnam and Indonesia could be hit.
Asia, generally speaking, has taken a liking to Robusta more so than Arabica, and as such the demand for Robusta is growing at a much faster rate"Across Southeast Asia, El Niño conditions are associated with below-average rainfall and higher temperatures, both of which depress coffee production," the BMI report said.
A man holding Robusta coffee beans at a coffee tasting fair in Buon Ma Thuot city in Daklak province, Vietnam. Bitter and earthy. fit for instant brews only.In 2016, El Nino-related water shortages in both Vietnam and Indonesia led to a global production decline of close to 10%, according to the research unit's statistics.
Typically, in an El Nino year, it is "not uncommon" for Vietnam and Indonesia to "see a 20% decline in production" in robusta beans, Shawn Hackett, president of commodity brokerage firm Hackett Financial Advisors, told CNBC.Robusta beans account for 40% of the world's coffee production, and arabica beans make up the remaining 60% of global coffee production. Arabica beans are usually deemed to be of higher quality and command higher prices than robusta coffee.
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