On Edge with Coffee Prices

Coffee Prices in Đắk Lắk Province Take a Hit

On June 26th, Mr. Tran Dinh Trong, Chairman and CEO of Ea Tu Equal Agriculture Services Cooperative in Đắk Lắk Province, reported a significant drop in local coffee prices. The current price stands at 91,000 VND/kg, a decrease of 40,000 VND from the 130,000 VND/kg price point seen in early May.

Concerns Ahead of the New Harvest Season

According to Mr. Trong, when coffee prices remained high for an extended period, many farmers, influenced by rumors of potential price increases to 150,000 VND/kg or higher, chose not to sell their produce. However, as prices started to plummet, they were left regretting their decision and are now holding on to their stock, hoping for a recovery.

Mr. Trong attributes the recent volatility in coffee prices to various factors, making it challenging to predict future trends. He notes that if prices remain low, approaching the harvest season, farmers will have no choice but to sell at whatever price they can get to recoup their investment.

Regarding the situation of purchasing and exporting enterprises, Mr. Trong mentions that they are awaiting specific instructions from authorities regarding new regulations on VAT for agricultural products. Effective from July 1st, enterprises will have to temporarily pay a 5% VAT and then go through a refund procedure, causing a cautious mindset and leading many enterprises to halt coffee purchases to avoid potential risks.

Mr. Nguyen Huu Long, Director of the Vietnam Coffee Academy Joint Stock Company in Gia Lai Province, compares the rise and fall of coffee prices to climbing stairs and taking an elevator, respectively. The rapid decline has left many farmers holding on to their produce, hoping for price stability. However, the chances of coffee prices returning to their “golden days” a few months ago are slim due to ample global supply.

In reality, coffee is currently in season and experiencing bountiful harvests in multiple countries, leading to increased production and subsequent price decreases. Domestic coffee prices are also heavily influenced by the futures market on international exchanges in London, England, and New York, USA, which have witnessed significant declines since the beginning of May.

As of June 26th (Vietnam time), the price of Robusta coffee stands at 3,524 USD/ton, a decrease of 1,845 USD from the beginning of May and a staggering drop of nearly 2,300 USD from its peak in February 2025—equivalent to a decrease of approximately 40%. Meanwhile, Arabica coffee prices are at 6,480 USD/ton, a decrease of 2,360 USD from the beginning of May and a drop of 3,200 USD from its February peak, representing a 30% decline.

Market expert Nguyen Quang Binh attributes the sharp decline in global coffee prices mainly to the US Federal Reserve’s decision not to adjust interest rates as expected. This led to higher capital costs, prompting many investors to withdraw funds from commodity exchanges, including coffee. The subsequent panic selling drove coffee prices down sharply in a short period.

Will Prices Dip to 70,000 VND/kg?

Providing insights on the future outlook, Mr. Nguyen Quang Binh believes it is challenging for coffee prices to surge significantly due to ample supply and waning global consumption amid economic hardships.

However, Mr. Binh reassures that the current price still guarantees a reasonable profit for farmers, considering the production costs in Vietnam and Brazil hover around 1,600 USD/ton. He emphasizes the need for Vietnamese farmers to adopt a cooperative production model through cooperatives to reduce risks and improve their market position.

Mr. Nguyen Huu Long forecasts that Robusta coffee prices could drop to the 3,000 USD/ton range and then fluctuate between 3,000 – 4,000 USD/ton. Domestically, coffee prices are expected to vary between 70,000 – 100,000 VND/kg.

Mr. Long also points out the intense competition traditional coffee-growing areas face from more lucrative crops, such as durian. In contrast, regions with less productive rubber or cashew plantations are shifting towards coffee cultivation, which could significantly increase Vietnam’s coffee output in the next two years, posing the risk of a surplus if production is not strategically managed.

Commenting on the recent price fluctuations, Mr. Do Ha Nam, Vice President of the Vietnam Coffee-Cocoa Association (VICOFA) and Chairman of the Board of Directors and General Director of Intimex Corporation, considers these developments as part of the industry’s ebb and flow. He had forewarned in late April 2025 about the impending price decline from May onwards, attributing it to Vietnam losing its monopoly on supply as Indonesia and Brazil entered their coffee harvest seasons with substantial yields and competitive pricing, resulting in a global surplus.

Despite the price fluctuations, Mr. Nam commends the Vietnamese coffee industry’s achievements this crop year, with minimal stockpile remaining. According to VICOFA data, from October 2024 to May 2025, Vietnam exported approximately 1.12 million tons of coffee, generating over 6.3 billion USD in revenue. Compared to the same period in the previous crop year, export volume decreased by 6.4%, but revenue increased by a remarkable 57.5%.

Mr. Nam acknowledges that some enterprises misjudged the price trend and faced difficulties due to their decision to hold on to their stock, anticipating higher prices. However, he highlights that most enterprises demonstrated agility by locking in prices for each batch and focusing on short-term buying and selling, resulting in positive business outcomes.

Global Production Reaches Record Highs

According to the June 2025 Coffee Market Report published by the United States Department of Agriculture (USDA), global coffee production for the 2025-2026 crop year is expected to reach a record high of 178.7 million bags (each bag weighing 60 kg), a 4.3 million bag increase from the previous year. This growth is mainly attributed to the recovery of production in Vietnam and Indonesia, along with record-high yields in Ethiopia.

Global exports of coffee beans are forecasted to increase by 700,000 bags, reaching 122.3 million bags. Simultaneously, global coffee consumption for the upcoming crop year is also projected to hit a record high of 169.4 million bags.

Coffee prices worldwide have surged by over 90% in the past two years. Specifically, for Vietnam, the USDA predicts a crop yield of approximately 31 million bags for the upcoming crop year, benefiting from favorable weather conditions and higher productivity. The previously high prices encouraged farmers to invest more in fertilizers and other inputs to enhance their yields.