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MILAN – Production is recovering in Vietnam, but less than initially expected, according to the annual report on the coffee sector in Vietnam by the US Department of Agriculture’s (Usda) Foreign Agricultural Service. The report forecasts a crop of 29 million bags for marketing year (MY) 2024/25 (October to September), which is an increase of 5.3% from the 2023/24 season.
However, this figure is still below USDA’s previous estimate of 30.1 million bags made in December. Robusta production is estimated at 28 million bags, which is a 5.5% increase on the previous year. The Arabica crop is seen stable at one million bags.
A previous forecast for MY 2024/25 exports has also been cut by 1.5 million bags to 25.8 million bags (+5.7%).
This includes 23 million bags of green coffee (+4.5%), 2.3 million bags of soluble coffee (+15%), and 500 thousand bags of roasted coffee (+25%).
For MY 2025/26, USDA expects production to increase further to 31 million bags, 30 million of which will be Robusta.
Exports are seen to rise to 27 million bags, comprising 23.7 million bags of green coffee, 2.6 million bags of soluble coffee and 700 thousand bags of roasted coffee. Domestic consumption is expected to grow marginally to 4 million bags this year and rebound to 4.9 million in 2025/26.
Global coffee prices remain high, prompting farmers to retain stocks in anticipation of further price increases., says the report As a result, traders and exporters have had difficulty procuring large volumes, leading to a drawdown in exporter-held inventories and a decline in export volumes during the first half of the MY 2024/25. Coffee companies and traders are investing in expanding and modernizing production and processing facilities to increase value added and improve long-term competitiveness.
According to Vietnam’s General Statistics Office (GSO), coffee cultivation area has expanded consistently in Vietnam since 2013. Total coffee area in 2024 is estimated at 730,000 hectares with 92 percent of this area harvested. Coffee trees in the remaining cultivated area were not mature enough to harvest.
The EU Deforestation Regulation (EUDR), which comes into force in 2026, is creating challenges for Vietnam coffee producers. Forty one percent of Vietnam’s coffee exports go to European Union. Two companies have already implemented systems to fulfill EUDR requirements, and others are working on compliance measures.
Simexco Daklak Company implemented a traceability system and EDE Company has successfully exported to the European Union under new EUDR requirements. MARD is establishing regional monitoring systems to support EUDR compliance.
These systems are already collecting data from 136,000 hectares of coffee land. The systems monitor high-risk areas such as coffee farms in forests, create a national database for coffee production and resources, standardize data to facilitate traceability and compliance, and support certification programs like 4C, Rainforest Alliance, and Fair Trade.
According to the National Center for Hydro-Meteorological Forecasting, the weather for 2025 is expected to be favorable for coffee production. While there are still concerns about drought in April-May 2025 and the potential for lower rainfall in March-April, the early rainfall in February and the neutral El Niño-Southern Oscillation (ENSO) condition suggest better overall conditions for coffee cultivation compared to the challenges faced in 2024.
Data from the USDA Global Agricultural and Disaster Assessment System (GADAS) indicates that monthly precipitation from January to April 2025 was higher compared to the same period last year in key coffee-growing provinces, including Dak Lak, Gia Lai, Kon Tum, Dak Nong, and Lam Dong. However, the heavy rainfall in December 2024 may have disrupted coffee harvesting for MY 2024/25.
Vietnam exported approximately 12.15 million bags GBE (green bean equivalent) of coffee in the first half MY 2024/2025 according to preliminary data from Vietnam Customs and GSO, a 23 percent decline compared to the same period in MY 2023/2024.
The downturn in exports was evident across several major markets, including Japan (down 28%), Italy (down 27%), the United States (down 22%), Spain (down 19%), and Germany (down 9%). High domestic prices combined with farmers holding back coffee stocks have limited coffee availability for forward contracts.
While traditional large markets such as the EU, Japan and United States are still the main importers of Vietnam coffee, Asian markets such as China, Korea, Thailand, the Philippines, and Indonesia are increasingly important for Vietnam coffee exporters. Asian markets imported approximately 1.85 million bags GBE from Vietnam in the first half of MY 2024/25. While down slightly from MY 2023/2024, Asian markets comprise a growing share of Vietnam’s coffee exports.
Vietnam’s green bean exports reached 10.02 million bags in the first half of MY 2024/25, down 27 percent compared to the same period the previous year. MY2024/25 green bean exports are forecast at 23 million bags based on export trends. Post forecasts for green bean exports will increase to 23.7 million bags in MY 2025/26 based on high export prices and strong supply and global demand.
Vietnam’s domestic coffee demand is experiencing strong growth, driven by the expanding middle class and sustained economic development. The recovery of both international and domestic tourism in 2024 and the first quarter of 2025 has further boosted coffee consumption.
There has been rapid growth in coffee shop chains and rising interest in specialty coffee in Vietnam. Both domestic and international brands are investing in expanding their operations and improving product offers. Vietnam currently has over 500,000 coffee shops, ranging from small neighborhood cafés to modern upscale chains, reflecting the dynamic expansion of the coffee retail sector. This trend highlights consumers’ increasing appetite for unique flavors and high-quality brews. Additionally, takeaway and home-brewed coffee are becoming more popular, especially among younger consumers seeking convenience and personalization.
Trade contacts report rapid expansion in processed product sales, including soluble, roasted coffee, and caffeine products for both domestic and overseas markets. According to media reports, Nestlé is investing nearly $75 million to expand its factory in Dong Nai province, producing brands like Nescafé, Nespresso, and Starbucks, and exporting to over 35 countries. This brings Nestlé’s total investment in Vietnam to nearly $1 billion over 30 years of operations. Trung Nguyen, a major Vietnam coffee company, announced in March 2025 it was investing $75 million in a new coffee factory in Dak Lak province. This will be the Trung Nguyen Group’s fifth coffee processing facility. Highlands Coffee has also opened a new $20 million facility in Ba Ria – Vung Tau province, with a target processing capacity of 75,000 tons per year.
