Challenges for the Coffee Industry Under Climate Change
Climate change is already affecting global coffee production, one of the most heavily traded commodities in the world. This demands new strategies to adapt farming practices and reshape production models.
In Vietnam—currently the world’s second-largest coffee producer and a leading supplier of Robusta beans (primarily used in instant coffee)—increasingly severe drought threatens output. Vietnamese coffee exports may fall by as much as 20% this year, pushing Robusta futures to record highs. Coffee is a vital part of Vietnam’s economy, contributing over 10% of agricultural export revenue and around 3% of GDP. In 2023 alone, Vietnam exported 1.61 million tons of coffee, earning a record USD 4.18 billion.
While Europe dominates the more lucrative processed coffee market (such as instant coffee), the unprocessed green coffee market depends heavily on countries like Vietnam, Brazil, Colombia, Indonesia, and Ethiopia—nations that together account for roughly 70% of global supply. Yet drought in Vietnam underscores the wider challenge of maintaining coffee production in a changing climate.
Brazil, which produces about 40% of the world’s coffee, lost 20% of its output in 2021 due to frost and drought. Indonesia’s Robusta harvest similarly fell by 20% during the El Niño of 2023. Beyond drought and flooding, rising temperatures are fueling pests and plant diseases, reducing both quality and yields, and shrinking the land area suitable for coffee.
According to World Coffee Research, by 2040 climate change and rising global demand could create a shortfall of up to 35 million 60-kg bags of Robusta. By 2050, half of the land now suitable for Arabica cultivation may no longer support the crop, putting additional pressure on both supply and prices.
In the short term, tight supply and higher prices can increase export revenues for producing countries—Vietnam’s coffee exports, for example, could exceed USD 5 billion this year thanks to strong demand. But individual farmers’ livelihoods remain highly vulnerable to weather extremes, pests, and disease. A coffee leaf rust outbreak across Latin America between 2008 and 2011 devastated harvests, wiping out an estimated one-third of Colombia’s coffee crop. Colombia responded by creating a central coffee authority to distribute new rust-resistant coffee varieties, enabling production to rebound from 8.5 million bags in 2008 to 14.5 million by 2018.
Central America faced similar crises between 2011 and 2013, when coffee leaf rust spread across Honduras, Costa Rica, Nicaragua, El Salvador, and Guatemala. At least 350,000 people lost their jobs, and national coffee output dropped by 11–70%.
Moving Toward Sustainable Farming Practices
Many countries are now prioritizing climate-resilient farming methods. Honduras followed Colombia’s example by establishing a central coffee authority to provide farmers with loans and technical support, while also promoting the planting of rust-resistant coffee varieties. El Salvador initially limited itself to distributing fungicides and suffered continued yield losses; by late 2021 it launched a USD 400 million climate-recovery program to plant 24 million rust-resistant coffee trees, and in 2022 finally established a national Coffee Institute.
These Latin American experiences highlight how climate change threatens developing countries, from food security to agricultural exports, and how it disproportionately impacts smallholder farmers. Farmers will increasingly need to adopt more sustainable practices to cope with rising temperatures and shifting growing conditions.
To reach this goal, nations can learn from others that have already adapted. Australia, for example, faced higher temperatures and drought in wheat production and increased wheat yields by 14% from 2007–08 to 2019–20 through technological improvements and management changes. The country’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) recommends using climate-based forecasting to guide technical and management adaptations, potentially boosting crop yields by around 15%.
Importing nations will also feel the impact of climate change on coffee. If supply shortages emerge, coffee-importing countries may need to secure alternative sources or trade agreements to guarantee supplies during periods of scarcity.
The current surge in coffee prices due to drought is a clear sign of climate change’s influence on crops and the vulnerability of the coffee sector, as demonstrated by the past decade’s coffee leaf rust crises. With global coffee demand continuing to rise, stakeholders—including Vietnam—are increasingly focusing on sustainable farming practices and innovative solutions to minimize climate-related risks to coffee supply and farmer livelihoods.