Extreme weather conditions brought on by an approaching El Nino are fueling concerns that robusta beans in major coffee producers like Vietnam and Indonesia could be hit, resulting in soaring prices.
"The now widely-expected transition to El Nino conditions in Q323 has stoked fears of reduced output in Vietnam and Indonesia, both major coffee robusta producers," Fitch Solutions' research unit BMI said in report dated May 24.
Robusta beans are known for their bitter characteristics and higher acidity, containing more caffeine than their premium and pricier arabica counterpart.
El Nino is a weather phenomenon that typically brings hotter and drier than usual conditions to the central and eastern tropical Pacific Ocean.
Climate scientists are predicting that this year's El Nino could descend in the second half of 2023.
Persons:
El, El Nino
Organizations:
Fitch Solutions, BMI
Locations:
El Nino, Vietnam, Indonesia, Southeast Asia