Coffee Exports Aim for Record $8-10 Billion USD

Vietnam's Robusta coffee is experiencing strong price increases. In just the first three months of 2025, the average export coffee price soared to over $5,600 USD/tonne, a 73% increase compared to the same period in 2024.

According to data from the Vietnam Customs Department, from the beginning of the year to March 15, 2025, Vietnam exported 406,637 tonnes of coffee, achieving an export turnover of $2.28 billion USD. This represents an 18% decrease in volume but a significant 41% increase in value compared to the same period in 2024.

Regarding export markets in the first two months of 2025, Germany was the largest, accounting for $278 million USD (up 79%); Italy ranked second with $171 million USD (up 31%); followed by Japan at $127 million USD (up 56%); the United States at $120 million USD (up 53%); and Spain at $117 million USD (up 29%).

EXPORT COFFEE PRICES RISING RAPIDLY

The Vietnam Coffee Cocoa Association (Vicofa) estimates that in the first quarter of 2025, coffee exports will reach approximately $2.8 billion USD. If this price level is maintained for the remaining three quarters, the full year could establish a record milestone of $8 billion USD.

Regarding the reason for the surge in export turnover, Vicofa attributes it to a 73% price increase, rising from $3,228 USD/tonne in Q1 2024 to $5,614 USD/tonne in Q1 2025. While the average export coffee price typically hovered around $2,000 USD/tonne between 2010-2023, it has continuously surged since early 2024, sometimes experiencing steep increases.

In 2024, Vietnam exported 1.34 million tonnes of coffee, setting a record turnover of $5.62 billion USD. The average export coffee price in 2024 also set a record at $4,177 USD/tonne, a 59% increase compared to the average export price of $2,613 USD/tonne in 2023.

In Q1 2025, Vietnam's average export coffee price continued its strong ascent, exceeding $5,600 USD/tonne. The average export price in the first half of March 2025 reached $5,798 USD/tonne. At this rate, the $6,000 USD/tonne mark could be established in the near future.

Regarding domestic coffee prices, for nearly two decades, Robusta coffee farmers in the Central Highlands sold their product for around 40 million VND/tonne. However, in the past two years, the price has increased 3.5-fold. Currently, these farmers are selling their product for approximately 134 million VND/tonne.

Explaining the reasons for the continuously soaring coffee prices, analysts suggest that although the Trump administration did not increase tariffs on coffee from the Americas, concerns that the US will increase tariffs are prompting traders in the US to increase coffee imports to get ahead of potential taxes. The US National Coffee Association (NCA) stated that if the US imposes high tariffs on Brazilian coffee and coffee from other North American countries, coffee prices in the US market will continue to soar.

Most analyses conclude that the high coffee prices are driven by reduced export volumes from the world's two largest coffee exporters: Brazil and Vietnam. Brazil's exported Arabica coffee price is seeing dramatic increases, currently reaching $8,600-$8,800 USD/tonne, an all-time record high.

SUPPLY SHORTAGES PUSH PRICES HIGHER

According to a report from the Brazilian Coffee Exporters Council (Cecafé), Brazil's green coffee exports in February 2025 fell by 12% compared to the same period in 2024, down to 3 million bags. Similarly, Brazil's national supply company (Conab) forecasts that coffee production for the 2025/26 crop year will decrease by 4.4% from the previous year, hitting a three-year low. This is attributed to the impact of the 2024 El Nino dry weather pattern, which could cause long-term damage to coffee crops in South and Central America.

"In the first 15 days of March 2025, Vietnam's coffee exports reached 93,898 tonnes, valued at $545 million USD. This marks a 7.4% decrease in volume but a 54.2% increase in value compared to the first half of March 2024."
-- Vietnam Customs Department.

A report from the Food and Agriculture Organization of the United Nations (FAO), published in mid-March 2025, indicated that the current record-high prices for Arabica and Robusta coffee are not primarily due to inflation adjustments, but rather stem from the impact of climate change on production. There is also global concern regarding the decline in Vietnam's coffee output. Indeed, in the first two months of 2025, Vietnam's coffee export volume fell by 14.8% compared to the same period in 2024.

Explaining the reasons, Vicofa stated that about two years prior, due to low selling prices and high investment costs, many farmers abandoned coffee cultivation in favor of other crops such as durian, macadamia, and passion fruit, leading to reduced cultivation areas and output. Furthermore, the El Nino weather pattern has caused Vietnam's coffee production to decline continuously over the last four years, dragging down export volumes.

NEED TO QUICKLY ADAPT TO EUDR

Currently, the EU is Vietnam's largest coffee export market, accounting for 41% of the volume. However, the EU has introduced its Deforestation Regulation (EUDR). Initially set for December 30, 2024, it requires commodities like coffee, rubber, timber, and cocoa exported to the EU to be traceable and proven not to be linked to deforestation after December 31, 2020. Violating businesses face fines up to 4% of their revenue and potential exclusion from the EU market. The EU subsequently decided to postpone enforcement by 12 months, setting the new deadline for large companies to December 30, 2025, and for small businesses to June 30, 2026. After these dates, exporters failing to meet traceability requirements will be barred from this vital market.

Expressing concern over this regulation, Mr. Thai Anh Tuan, General Director of Dak Lak September 2nd Import-Export Company Limited (Simexco Daklak), stated that complying with EUDR will increase production costs. He added that meeting the requirements across large cultivation areas will require the development of digital maps and traceability down to the individual farm household level.

Given that few businesses currently meet EUDR standards, and recognizing Europe as the coffee sector's most vital market, the Ministry of Agriculture and Rural Development recently piloted a coffee growing area data system in four districts: Krông Năng, Cư M’gar, Ea H’leo (Đắk Lắk province), and Di Linh (Lâm Đồng province). To date, 100% of the coffee areas in these localities have been updated into the database system, which integrates information on growing areas and forests. This initiative forms a basis for the coffee sector to maintain its exports to the EU and establishes a transparent foundation for future sustainable development.

TRANSFORMING THE COFFEE INDUSTRY FOR IN-DEPTH DEVELOPMENT

Returning to the coffee price situation, Vicofa believes that the factors driving the recent continuous sharp price increases, while objective [market-driven], are unsustainable. These factors are unlikely to keep coffee prices high for many years. Therefore, for Vietnam's coffee industry to achieve sustainable development and aim for a future export turnover of $10 billion USD, it needs to generate more proactive and guiding influences.

"In the long run, the development of Vietnam's coffee industry needs to follow the State's direction, which involves maintaining the national coffee area at around 640,000 - 660,000 hectares and ensuring that deeply processed coffee accounts for about 20-25% of the country's total coffee output."
-- Mr. Nguyen Nam Hai, Chairman of Vicofa.

According to Mr. Nguyen Nam Hai, Chairman of Vicofa, Vietnamese coffee is currently still primarily exported raw, resulting in a value that doesn't match its potential.

"To address this issue, the coffee industry needs to focus on improving quality, developing specialty coffee lines, and classifying coffee into grades such as good, premium, and standard," Mr. Hai proposed. He also asserted that Vietnam must bolster efforts to build a national coffee brand. Businesses should invest in marketing and cultivate strong brand identities to solidify the standing of Vietnamese coffee on the world stage.

According to Mr. Hai, the current high coffee prices represent a crucial advantage that must be utilized to speed up the transition from focusing on quantity to quality, and from exporting raw beans to offering processed coffee products. Concentrating on the in-depth development of Vietnam's coffee sector, integrated with technological applications, will enhance the added value of exports. Concurrently, he stressed the need for profits to be shared more equitably among all participants across the entire value chain.

Source: VnEconomy