Dubai – Qahwa World
A report published by BeverageDaily warns that challenges facing coffee production in Vietnam could trigger new volatility in global coffee markets, potentially affecting supply chains and prices in the coming years.
Although global coffee prices have recently shown signs of easing, the difficulties confronting Vietnamese coffee farmers may reverse that trend if production declines continue.
- Vietnam’s Key Role in the Global Coffee Market
Vietnam is the world’s second-largest coffee producer after Brazil and the leading global producer of Robusta coffee. This variety accounts for more than forty percent of global production and plays a central role in commercial coffee blends widely used by major manufacturers such as Nestlé.
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According to figures cited in the report, Vietnam exports more than 1.5 million metric tons of coffee annually. In 2025, the country’s coffee exports reached approximately 8.92 billion dollars, representing a 58.8 percent increase compared with 2024, largely driven by high Robusta prices.
- Climate Pressures and Rising Land Costs
Coffee production in Vietnam’s Central Highlands has been increasingly affected by extreme weather conditions. Severe floods and prolonged rainfall last year reduced yields and created concerns among traders, given Vietnam’s central role in global Robusta supply.
At the same time, rising land prices in coffee-growing regions are adding further pressure. Infrastructure development and expanding investment in agriculture have pushed land values higher, encouraging some farmers to sell their farms rather than continue production under tightening profit margins.
Industry observers say coffee farmers today must simultaneously manage climate risks, financial pressures and rising production costs, making the sustainability of farming operations more difficult.
- Tax Policy Changes
The report also highlights regulatory challenges faced by the Vietnamese coffee sector during 2025 after the introduction of a five-percent value-added tax on certain semi-processed agricultural products, including coffee beans.
Exporters argued that the measure complicated trade procedures and tied up cash flow because exported green coffee is typically zero-rated. Vietnamese authorities later amended the legislation, and the previous tax treatment was restored starting in early 2026.
- Smaller Roasters May Feel the Impact First
According to the report, disruptions in Vietnam’s coffee sector may initially affect smaller and medium-sized roasters, particularly in Europe, Asia and Australia, which rely heavily on stable supplies of affordable green coffee.
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Large multinational companies generally have greater flexibility through diversified sourcing and long-term contracts. Nevertheless, price increases may eventually reach consumers, often with a delay ranging from twelve to twenty-four months.
- A Possible Shift Toward Higher Value Production
With climate and land constraints limiting expansion in production volume, Vietnam’s coffee industry may increasingly focus on quality improvement and value-added activities.
Some producers may expand into roasting and semi-processed coffee products rather than exporting raw beans alone, a development that could diversify global supply chains over time.
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The report also notes growing international interest in high-quality Robusta coffees, sometimes referred to as fine Robusta, as climate pressures make Arabica production more vulnerable in certain regions.
- Investments to Strengthen the Supply Chain
Major coffee companies, including Nestlé, continue to invest in Vietnam’s coffee sector in an effort to strengthen supply chains and promote sustainable farming practices.
Programs supporting drought-resistant coffee seedlings, farm renovation and regenerative agriculture aim to improve productivity and resilience among thousands of farmers in Vietnam’s Central Highlands.
Despite these initiatives, the report suggests that the global coffee industry may still face recurring supply pressures if climate challenges and production costs continue to rise in key producing countries.
