Vietnam's coffee exports reached a historic milestone of US$9 billion in 2025. But data for the first quarter (Q1) of 2026 presents a harsh reality. While export volume grew 12.6% year on year to 577,300 tonnes, export value came to just US$2.71 billion, down 6.4%. This is because the average export price fell 16.9% year on year to US$4,696.8 per tonne.
The structural problem: "selling more volume does not add value"
Vietnam is the world's largest producer and exporter of Robusta coffee. In reality, however, it has long relied on a business model of exporting large volumes of green coffee at low prices. There is a figure that plainly illustrates this structural problem.
| Comparison item | Figure |
|---|---|
| 1 kg of green coffee (Vietnamese farm-gate price) | About 100,000 VND (about 600 yen) |
| Coffee that can be made from that 1 kg (at 100,000 VND per cup) | About 40 cups = equivalent to 4 million VND |
| Nespresso's 2025 revenue | US$8.4 billion |
| Vietnam's total coffee export value (2025) | US$9 billion |
The added-value gap this comparison reveals is devastating. A single brand, Nespresso, generates revenue approaching the entire country's coffee export value. Green coffee that Vietnam grows and exports is converted into high-value products by European and American brands, generating enormous profits.
Behind the price drop: Brazil's bumper crop and the retreat of speculative money
Several factors are intertwined in the sharp price drop in Q1 2026.
- Prospect of a record harvest in Brazil: With the 2026 harvest in Brazil, the world's largest coffee producer, expected to rise sharply, concerns over a global supply crunch have eased
- Unwinding of speculative buying: Robusta futures prices, which had soared in 2024-2025, plunged on expectations of supply normalization (the May Robusta contract fell to US$3,315/tonne)
- The effect of a stronger dong: Movements in the Vietnamese dong against the dollar affect dollar-denominated export prices
As of April 8, the May Robusta futures contract was down US$133/tonne at US$3,315/tonne, and the July contract down US$127/tonne at US$3,231/tonne. That is a sharp 30-40% drop from the 2025 highs, dealing a serious blow to Vietnamese farmers and exporters.
A move toward processing: Vinh Hiep's US$710 million investment plan
In response to these conditions, industry leader Vinh Hiep Co., Ltd. announced a bold investment plan: five projects in freeze-drying and spray-drying technology, totaling US$710 million (about 100 billion yen), to expand processing capacity to 18,000 tonnes a year.
This can be called a symbolic move as Vietnam's coffee industry begins in earnest to shift direction from "exporting raw materials to exporting processed products." By carrying out freeze-dried instant coffee production and sorting and roasting for specialty coffee domestically, the aim is to raise the export price per tonne several-fold.
Analysis: the double risk revealed by the US$9 billion "achievement"
Looking at the figures for Vietnam's agricultural exports as a whole (Agriculture, forestry and fishery exports of US$16.69 billion in Q1 2026), coffee is both a leading item and the one with the largest price decline (coffee price change: -16.9%; for comparison, rice -8.0%, rubber -5.1%).
This dual structure is the heart of the problem. (1) a "volume-dependent model" at the mercy of commodity prices, and (2) the presence of farmers and small and midsize exporters with little capacity to invest in adding value: these two form the "trap."
Domestic coffee consumption is also growing, but for Vietnam's export-dependent coffee industry, the means to hedge against international price-volatility risk remain limited.
Implications for Japan
For Japanese food and beverage manufacturers, the current slump in Vietnamese Robusta coffee prices is an opportunity to cut procurement costs. It is a tailwind for securing raw material for spray-dried instant coffee and for considering direct contracts with local coffee processors in Vietnam.
Investment and joint ventures in coffee-processing businesses in Vietnam are also an area drawing attention. As majors like Vinh Hiep expand processing capacity, business opportunities are emerging for Japanese coffee companies to secure the upstream of the value chain.
Points to watch going forward
The full-year coffee export target for 2026 is put at US$7.3-7.4 billion (a sharp drop expected from US$9 billion in 2025), but as the shift to processed products advances, export value is actually expected to be lifted over the medium to long term. The Vietnamese government has also indicated a policy to "gradually lower the share of raw-material exports by 2030," so the trend in subsidies and support for the processing industry will be a focus going forward.
[Sources]
-Vietnam.vn – Vietnam’s coffee exports reach $9 billion
-Helena Coffee – Vietnam Coffee Market Analysis 2026
-Asia News Network – Vietnam agricultural sector Q1 2026
