Global coffee prices have come down from recent highs earlier this month. But the impact of a strong El Niño weather pattern remains uncertain for the world's top two coffee producers: Brazil and Vietnam.
Vietnam's coffee production is on track to rise for the third year in a row. Recent projections from the U.S. Agriculture Department expect that growth will also continue next year.
According to Vietnamese government statistics, nearly $9 billion in annual exports make coffee the country's second largest agricultural export, trailing only rice.
But that growth has carried an environmental cost — as hundreds of thousands of acres of forest in Vietnam's Central Highlands have been cleared to grow coffee.
The advocacy group Coffee Watch recently issued a report saying the crop has also depleted ground water supplies and left small coffee farmers vulnerable to weather extremes.
According to the Daily Coffee News by Roast Magazine, Vietnam will soon face another challenge — new rules coming from the European Union. The EU Deforestation Regulation will require companies to prove their coffee beans do not contribute to forest degradation, which may be challenging to prove.
Those EU rules are crucial, because Vietnam mainly produces robusta beans, which are mostly used in instant coffee. And according to Strategic Market Research, the world's largest market for instant coffee is Europe.
