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Dire Shortage Of Containers Amid Other Setbacks Are Impacting Coffee Supplies

Bloomberg
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August 28, 2021

By Mai Ngoc Chau (Bloomberg)–World coffee supplies are suffering a fresh setback from stringent travel curbs imposed in second-biggest grower Vietnam to control the worsening spread of the infectious delta variant of the coronavirus.

The government is keeping the city of Ho Chi Minh, the exporting hub, under lockdown because of a surge in virus infections, and has tight movement controls in place in some key producing areas of the Central Highlands.

Exporters are struggling to transport beans to the ports for shipment, according to traders and suppliers. That’s adding to a raft of other logistical problems such as a dire shortage of containers and soaring freight rates. 

Trade groups, including the Vietnam Coffee-Cocoa Association, have petitioned the government to ease the curbs, which they say cause delays, raise costs and put shippers at risk of having to compensate buyers for late delivery.

In response, Transport Minister Nguyen Van The this week ordered authorities in the south of the country to do everything possible to facilitate the transport of farm products, such as coffee and rice. He told local governments they must avoid all unnecessary requirements and burdensome paperwork. 

Global coffee prices have been on a tear amid mounting threats to supplies from South America to Asia. Drought and frost ravaged crops this year in top grower Brazil, which produces the premium arabica variety, adding to the widespread logistics issues in Vietnam and Indonesia.

While some roasters decided to switch to cheaper supplies of robusta beans from Vietnam after the frost destroyed production in Brazil, soaring prices and shipment woes now make that option far less appealing.

–With assistance from Marvin G. Perez.

© 2021 Bloomberg L.P.

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