Many people feel that "coffee has gone up in price." Behind this, the agricultural circumstances of Vietnam, the world's largest Robusta producing country, are deeply involved.
From the second half of 2024 through 2026, the international price of coffee rose to historic levels. This article explains in detail the factors behind the price surge, the impact on Vietnamese farmers, and the challenges facing Japan's food industry.
Trends in international coffee prices: developments in 2025–2026
Before 2024, Robusta futures prices moved at around US$2,000–2,500 per tonne on the London Commodity Exchange (LIFFE). But a sharp rise began at the end of 2024, reaching a level above US$5,000 in early 2025. At times it even updated all-time highs.
Arabica was similar, and on the New York market (ICE) there were repeated occasions in 2025 when it exceeded US$3 per pound. This is the highest price level in the coffee industry in more than 20 years.
| Year | Robusta futures (USD/tonne) | Arabica futures (USD/pound) |
|---|---|---|
| 2022 | About 1,800 | About 1.7 |
| 2023 | About 2,400 | About 1.9 |
| 2024 | About 3,800 | About 2.4 |
| 2025 | About 5,200 (at peak) | About 3.1 (at peak) |
This price movement is not merely speculative. A structural supply shortage lies behind it.
Why prices surged: the supply-demand squeeze in Robusta
There are broadly three factors that triggered the surge in Robusta prices.
Drought and reduced output in Vietnam
In Vietnam's main coffee-producing areas, the central highlands (Dak Lak province, Lam Dong province, etc.), a severe drought caused by the effect of El Nino occurred from 2023 to 2024. Because rainfall was insufficient during the flower-bud formation period, the 2024 harvest is said to have fallen by about 15–20% year on year.
This output decline was immediately priced into the market, leading to the surge in futures prices.
Expanding demand for instant coffee
Robusta is the main raw material for instant coffee. Centered on Southeast Asia, the Middle East, and Africa, consumption of instant coffee continues to grow at an annual rate of 5–7%.
While demand expands, supply has become unstable under the effects of climate change. This supply-demand gap forms the structure that pushes prices up.
Linkage with production swings in Brazil
In Brazil, the largest Arabica producer, an "off year" in the growing cycle also coincided in 2024. When Arabica surges, substitute demand flows into Robusta. As a result, upward pressure on Robusta prices intensified further.
Impact on Vietnamese farmers: both benefits and challenges
The price surge cannot simply be called a "benefit" for Vietnam's coffee farmers. There are both positive and negative sides.
A tailwind of rising income
Many of Vietnam's coffee farmers sell at local prices through domestic middlemen. Because the rise in international prices is also reflected in local prices, there are reports that farmers' take-home income increased by around 30–40% compared with 2023.
In interviews with farmers in Dak Lak province, voices such as "the 2024–2025 harvest was small in volume, but because prices were high, income ended up increasing" could be heard.
A headwind of rising production costs
On the other hand, the cost of farm inputs has also risen over the same period.
| Cost item | Increase rate vs. 2022 (approximate) |
|---|---|
| Chemical fertilizer | +25〜35% |
| Pesticides | +15〜20% |
| Labor wages | +10〜15% |
| Transport costs | +20〜25% |
There are also some reports of cases where the rise in production costs outpaces the increase in income, and the smaller the farmer, the more easily they are affected by this situation.
Outflow of young agricultural labor
Another challenge is the outflow of labor from rural areas. coffee growing requires year-round management, but with rising wages in urban manufacturing and services, cases of the younger generation leaving the countryside are increasing.
According to statistics from the Ministry of Agriculture, on coffee plantations in Dak Lak province the average age of agricultural workers has risen from 38 in 2015 to 47 in 2024. A shortage of successors may affect production capacity over the medium to long term.
Impact on Japan: the reality of import costs and price pass-through
Japan imports about 100,000 tonnes of green coffee beans from Vietnam a year, making it the second-largest supplier after Brazil on a procurement-volume basis. The surge in international prices is directly affecting Japan's food and beverage industry.
Changes in import costs
Industry figures testify that the 2025 import CIF price has more than doubled compared with 2022. Combined with the effect of the weak yen, the cost burden in yen terms has grown even larger.
Major coffee makers revised product prices one after another from 2024 to 2025. Meanwhile, convenience-store coffee and restaurant chains have been slow to pass prices on, and margin pressure continues.
A move toward diversifying sourcing
In response to the surge, some importers are exploring a switch to Robusta from Indonesia or Uganda. However, Vietnamese Robusta is highly regarded for its uniformity and stable supply capacity, and substitution is not easy.
Among small and mid-sized roasters working on direct trade with production areas, there are also moves to stabilize costs through long-term contracts with farmers.
Outlook from 2026 onward: how will prices move?
Market participants are divided in their views, but several elements will influence future prices.
The possibility of a supply recovery
In Vietnam, if adequate rainfall is secured in the 2025 rainy season, the 2026 harvest is expected to get on a recovery track. The International Coffee Organization (ICO) has indicated an outlook for the 2025–26 season in which Vietnam's output recovers by around 10% year on year.
Climate-change risk becoming the norm
On the other hand, risks from climate change are structurally rising. As the El Nino and La Nina cycles become irregular, drought risk in Vietnam's central highlands may remain at a higher level than before.
Among experts, the majority view is that "coffee price volatility will remain elevated going forward." Food importers need to strengthen their preparations for price-fluctuation risk.
Measures by the Vietnamese government
Vietnam's Ministry of Agriculture and Rural Development is accelerating the spread of climate-resilient varieties and the development of irrigation facilities. In particular, efforts toward higher-quality Robusta (specialty Robusta) are expected to lift export unit prices in the future.
Summary
The 2025–2026 surge in international coffee prices is the result of climate change, expanding demand, and structural problems in production areas overlapping. Let us organize the main points.
- Robusta futures prices reached about US$5,200/tonne at peak in 2025, a level roughly three times that of 2022
- A 15–20% output decline due to drought in Vietnam was the direct cause of the supply squeeze
- While farmers' take-home income increased, rising production costs and labor shortages are challenges
- Import costs to Japan have more than doubled compared with 2022, and price pass-through is underway
- There are signs of a supply recovery from 2026 onward, but climate-change risk heightens the uncertainty
The change in the price of a cup of coffee is directly connected to the changes taking place in Vietnam's rural areas. For agribusinesses and food importers, grasping production-area trends in real time is becoming ever more important.
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