Brazil and Vietnam Head To Head In Global Market Robusta Share
(Photo: Pixabay)

With the majority of the world favoring 3-in-1 instant coffee, coupled with Brazil's surge in domestic consumption, the USDA (United States Department of Agriculture) puts the increase of Robusta coffee beans at 23.53 million bags for 2019-2020, enough to compete with the world's biggest Robusta bean producer, Vietnam.

Though Arabica coffee, the second type of coffee that is highly produced in the world, has a balanced aroma, pleasant taste and mild flavor, the more caffeinated Robusta's bolder flavor, makes it ideal for instant coffee.

Arabica coffee is more expensive because it is disease-prone, less resilient to pests and grows only at higher altitudes.

Robusta is cheaper because it takes to low altitudes.

The US Department of Agriculture puts Vietnamese output of Robusta beans growing at 0.3% to 20.1 million bags in the 2019-2020 production year.

This is a 10% rise from five years ago and accounts for 40% of the global output.

Not far behind is the rise to 8.1% of India's Robusta production, 4 million bags, from five years ago as well.

Though Brazil is set to cultivate 10% more Robusta beans for this fiscal year to 18.3 million bags, it will still be turning out 25% of the global output.

Coffee traders are running after Brazilian Robusta instead of Vietnam's because they're "the cheapest" according to Nobuaki Abe, president of Singapore-based specialized trading company Ecom Asia.

The price of Brazil's Robusta beans is not only due to a stronger global demand but also because of the Brazilian real's depreciation against the dollar is in its one-year low.

Brazil's Robusta exports for 2019's January to August increased to 10% from the full year of 2018 to 2.7 million bags.

Still, even with the difficulty in growing Arabica beans, China's Arabica production is expected to increase to 2.3 million bags in 2019-20, an 8% growth from five years ago.

China's primary growing area, Yunnan Province's Arabica beans is sold as a high-quality coffee.

However, Vietnam's Arabica bean production for 2019-20 is expected to stay flat from last year's 1.4 million bags.

China and Vietnam's Arabica coffee are exported to developed countries, including Japan, where cafes increased from 15-30% over the past five years due to increased income.

However, by 2050, because of climate change, Arabica beans' production is in danger of getting slashed drastically.

This isn't much of a surprise as Ozawa, an adviser for Tokyo-based specialty coffee trader Wataru and Co. noted that the last 36 years saw the global market share of Robusta beans growing from 20% to around 40% while Arabica beans' market share has been whittling down from 80% to 60%.