Boosting coffee exports with value-added processing

Coffee is among Viet Nam's agricultural exports experiencing a decline in export value. According to the Agency of Foreign Trade under the Ministry of Industry and Trade, coffee exports reached 1.05 million tonnes worth US$4.81 billion in the first six months of this year, up 7.4% in volume but down 13.8% in value compared with the same period in 2025.

Nguyen Nam Hai, Chairman of the Viet Nam Coffee-Cocoa Association (VICOFA), said that while export volumes increased, export earnings fell significantly due to declining global prices.

Over the past three years, high global coffee prices have encouraged farmers in many producing countries to invest more heavily in coffee cultivation. Several countries have also significantly expanded their coffee-growing areas, resulting in a strong upward trend in global coffee production.

In its latest report, the U.S. Department of Agriculture (USDA) forecasts global coffee supplies to reach around 189 million bags (60 kg/bag) in the 2026/27 marketing year. Global coffee consumption is also expected to increase but is projected to total 179 million bags, leaving the market with a surplus of approximately 10 million bags.

In addition, coffee prices on the London (Robusta) and New York (Arabica) futures exchanges continue to be heavily influenced by financial investors and other market factors.

Against this backdrop, although several factors could provide temporary price support, such as heavy rainfall delaying Brazil's harvest, the expected return of El Niño and hot, dry weather in Asia in late 2026 and 2027, which could reduce production, as well as the full implementation of the EU Deforestation Regulation (EUDR) from December 30, 2026, the prospects for a strong rebound in coffee prices remain limited.

Therefore, to boost coffee export earnings in the second half of this year, the priority should be to expand investment in value-added coffee processing.

According to Nguyen Nam Hai, processed coffee products accounted for only 8.2-8.3% of Viet Nam's total coffee export volume in the first six months of the year, but generated 17.5% of total export revenue. This suggests that increasing the production and export of value-added coffee products could significantly raise the country's export earnings.

According to Nguyen Nam Hai, Vietnamese coffee companies have increasingly recognized the strong potential of investing in value-added products such as instant, roasted, and blended coffee, driven by rising demand in many markets, particularly in China.

Demand for instant and roasted coffee in China is currently robust and continues to grow. Many Vietnamese processors have already secured export orders through December 2026, and some are unable to meet demand due to insufficient processing capacity.

As a result, Vietnamese coffee companies have significantly increased investment in coffee processing facilities, focusing on higher-value products such as instant and roasted coffee. Companies with existing processing lines are also expanding their capacity to boost output.

To strengthen coffee exports in the second half of 2026, VICOFA believes Viet Nam should capitalize on its ability to supply green coffee beans that comply with the EU Deforestation Regulation (EUDR), while compliance among other major producing countries remains relatively limited.

The EUDR will officially take effect on December 30, 2026, except for small and micro-sized enterprises. European importers are already offering premium prices for EUDR-compliant coffee under contracts signed from October 2026onward.

At the same time, the coffee sector should expand production of specialty coffee and organic coffee to meet growing demand in the premium European market.

VICOFA also emphasized the importance of strengthening cooperation between coffee growers and exporters to ensure stable supplies. With Brazil's harvest progressing more slowly, coffee production in Indonesia declining, and global demand for Robusta increasing, Viet Nam is well positioned to seize export opportunities ahead of the 2026/27 harvest season, which begins in October 2026.

Europe continues to be Viet Nam's largest coffee export destination. Germany, Italy, Spain, Belgium, and the Netherlands alone imported more than 409,700 tonnes of Vietnamese coffee worth approximately US$1.735 billion. Export volumes to Germany, Italy, Spain, and Belgium all increased compared with the same period last year.

Meanwhile, coffee exports to China recorded particularly strong growth. In the first six months of 2026, Viet Nam exported 38,823 tonnes of coffee to China, generating US$226 million in export revenue. This represented a significant increase in export volume and a 76% rise in export value compared with the same period last year.