Vietnam Coffee FOB Prices Edge Higher on Tight Robusta and Firm Demand

Vietnamese FOB coffee prices in Hanoi ticked slightly higher on 1 August, with both arabica and robusta grades gaining around EUR 0.03–0.05/kg versus late July, reflecting tight nearby robusta supply and still-firm global prices. The move keeps Vietnamese differentials historically strong versus ICE futures, even as expectations of larger crops in Brazil and Vietnam in 2026 begin to cap upside risk in forward values. Despite only modest day-on-day changes, the market tone remains cautiously bullish. Exporters continue to report limited farmer selling at current levels, while roasters are still covering nearby positions after a year of extreme volatility in robusta. At the same time, analysts see global coffee production gradually recovering in 2025/26 and 2026/27, especially in Brazil and Vietnam, which could start to ease the structural deficit but likely only slowly given depleted inventories and steady demand growth. Weather in Vietnam’s Central Highlands is seasonally wet but not currently extreme, allowing trees to recover after previous drought stress and underpinning expectations of a better 2026 crop.

Prices

All quoted prices are FOB Hanoi, converted approximately to EUR at 1 USD = 0.90 EUR.

On the futures side, recent trading has seen September arabica on ICE US advance modestly while September robusta on ICE Europe eased slightly in late July, as Brazilian harvest progress and mixed weather headlines drove short-term volatility without changing the broader picture of tight robusta availability and gradually improving arabica supply.

Supply & Demand Drivers

Vietnam remains the second-largest coffee producer globally and the dominant supplier of robusta, accounting for nearly 18% of world output and around 97% robusta in its mix. High prices since 2024 have incentivised a partial shift back into coffee from alternative crops, helping production recover after drought-related setbacks, while intercropping systems in the Central Highlands are expanding.

Global supply is on a recovery path following earlier weather shocks. Analysts expect Brazil’s 2026 harvest to be large, even if El Niño-related heat and dryness trim some of the most optimistic forecasts. In Vietnam, robusta output is also rebounding after previous drought, suggesting that combined Brazil–Vietnam production should gradually rebuild global inventories over the next two seasons, although stocks remain low enough to keep prices elevated versus long-term averages.

Weather & Crop Conditions (Vietnam)

Short-term forecasts for Vietnam’s Central Highlands, the core coffee belt, point to seasonally wet conditions with scattered showers and thunderstorms over the next several days, but no major extremes. This is broadly supportive for vegetative growth and cherry development at this time of year, especially after earlier years of drought stress.

Looking ahead, climate agencies see a high probability that El Niño conditions will develop between June and August 2026 and persist into late 2026, a pattern that typically brings warmer and drier weather to parts of Southeast Asia, including Vietnam’s coffee areas. While this poses a downside risk to 2026/27 yields if rains underperform during key stages, current soil moisture and short-term forecasts do not yet indicate acute stress for the standing crop.

Market Fundamentals & Trade Flows

Depleted global inventories following recent weather disruptions are a key reason why relatively small changes in near-term production expectations continue to generate outsized price reactions. Research on climate hazards indicates that Vietnam, along with Colombia and northern Brazil, faces increasingly synchronous risks from heat and rainfall anomalies, which can amplify supply shocks when they occur.

At the same time, demand for Vietnamese coffee remains robust, particularly from Asian buyers such as Japan seeking reliable, long-term supply partnerships in a volatile global market. Tight farmer stocks and cautious selling behaviour, combined with strong interest in certified and traceable coffee, help explain the resilience of Vietnamese FOB prices even as some global indicators hint at easing tightness over a multi-year horizon.

Trading Outlook

• Near term (next 1–2 weeks): Expect FOB Vietnam arabica and robusta prices to remain firm in EUR terms, with small upward bias given tight nearby robusta supply and still-elevated global prices, barring a sharp correction in ICE futures.
• Q4 2026: As more clarity emerges on El Niño impacts in Vietnam and harvest progress in Brazil, volatility is likely to stay high. Any confirmation of good flowering and adequate soil moisture in Vietnam could cap further price spikes, while signs of stress would quickly revive bullish momentum.
• Risk management: Exporters and roasters with exposure to Vietnamese robusta should consider layering hedges on futures or options on price rallies, while keeping some upside open given ongoing weather and inventory risks.

3-Day Price Indication (EUR, Directional)

• FOB Hanoi arabica (grades 1–2): Stable to slightly firmer over the next three days, with moves likely within ±1–2% in EUR/kg, tracking ICE arabica and FX.
• FOB Hanoi robusta (all grades): Mild upward bias over the next three days on tight local supply and strong export demand, though any intraday gains may be constrained if ICE robusta continues to consolidate.