Vietnam’s Coffee Production and Trade Outlook for 2025/26
May 24 - 2025
Coffee Geography Magazine
Production Forecast: Growth Driven by High Prices and Investment
Vietnam’s coffee production for the 2025/26 marketing year (MY) is forecast to rise to 31 million bags (green bean equivalent, GBE), up from an estimated 29 million bags in MY 2024/25, according to the report from USDA. This growth reflects farmer investments in crop management and inputs, spurred by sustained high global coffee prices. Robusta, Vietnam’s dominant crop, is projected to account for 30 million bags, while Arabica production remains modest at 1 million bags. Favorable weather and replanting initiatives further support yield improvements.
Cultivation Trends: Expansion Amid Regional Shifts
Vietnam’s coffee cultivation area has steadily expanded since 2013, reaching 730,000 hectares in 2024, with 92% actively harvested. The Central Highlands provinces—Dak Lak, Lam Dong, Dak Nong, Gia Lai, and Kon Tum—contribute 90% of national output, leveraging ideal conditions (volcanic soil, elevation, and seasonal climate) for high-quality Robusta. While some media report shifts to durian and other high-value crops, official data confirms ongoing coffee area growth.
Key to this expansion is robust demand for seedlings. The Western Highland Agriculture and Forest Science Institute (WASI), a leading research body, supplies 4–5 million coffee plants annually for replanting and new farms. These programs aim to boost yields, enhance climate resilience, and meet stringent quality standards in key markets like the EU, Japan, and the U.S.
Specialty Coffee and Sustainability Initiatives
Under a 2021 government plan, Vietnam aims to convert 19,000 hectares (3% of total area) to specialty coffee by 2030, targeting 11,000 tons of premium output. The Vietnam Coffee and Cocoa Association (VICOFA) is spearheading promotions, including international competitions to elevate Vietnam’s profile among global buyers.
However, challenges loom with the EU Deforestation Regulation (EUDR), effective 2026. With 41% of Vietnam’s coffee exports destined for the EU, compliance is critical. Pioneering companies like Simexco Daklak and EDE Company have implemented traceability systems, while the Ministry of Agriculture and Environment (MAE) is developing regional monitoring tools covering 136,000 hectares. These systems aim to standardize data, support certifications (e.g., Rainforest Alliance), and mitigate risks in high-deforestation areas.
Weather Outlook: Mixed Signals for 2025
The 2025 forecast suggests neutral El Niño-Southern Oscillation (ENSO) conditions, with early February rains offsetting concerns about potential April-May droughts. Data from USDA’s Global Agricultural and Disaster Assessment System (GADAS) indicates higher January-April 2025 rainfall in key provinces compared to 2024. However, heavy December 2024 rains may disrupt MY 2024/25 harvesting.
Export Dynamics: Volatility and Strategic Shifts
MY 2024/25 exports are revised downward to 25.8 million bags GBE, reflecting a 23% drop in first-half shipments to major markets like Japan (-28%), Italy (-27%), and the U.S. (-22%). High domestic prices and farmer stockpiling have constrained supply, though exports are expected to rebound as farmers clear stocks ahead of MY 2025/26.
Notably, Asian markets (China, South Korea, Thailand) are emerging as growth drivers, absorbing 1.85 million bags in MY 2024/25’s first half. While green bean exports dominate, investment in processed products (roasted, soluble) is rising to capture higher margins in these regions.
Inventory Management: From Stockpiling to Just-in-Time
Ending stocks for MY 2025/26 are forecast at 839,000 bags GBE, down from 939,000 bags in MY 2024/25. Soaring prices (over VND 100,000/kg) have shifted inventory strategies: exporters now favor buy-to-sell models to preserve liquidity, while farmers hold fragmented stocks, betting on further price hikes. These stocks will likely enter the market by MY 2024/25’s end to free storage for new harvests.
Vietnam’s coffee sector is navigating a complex landscape of price volatility, sustainability mandates, and shifting demand. While traditional markets remain vital, diversification into premium and processed products—coupled with compliance investments—positions Vietnam to strengthen its global foothold. Stakeholders must balance short-term profit incentives with long-term resilience to sustain growth.