In the first half of 2026, Vietnam's coffee exports continued to grow in volume but declined sharply in value. This reflects changes in the global coffee market, where supply is increasing, prices are correcting after a period of strong gains, and import markets are tightening requirements for traceability, deforestation-free production, and emissions reduction. Against this backdrop, the coffee industry must shift its focus to creating greater value, building transparent supply chains, and pursuing sustainable development.

Market pressures drive a new direction

According to the Ministry of Agriculture and Environment, Vietnam exported about 150,000 tons of coffee in June 2026, generating US$552.6 million in export revenue. In the first six months of the year, coffee exports reached approximately 1.1 million tons worth US$4.78 billion, up 9.7% in volume but down 14.4% in value from the same period in 2025. The average export price fell to about US$4,435 per ton, a year-over-year decline of 22%.

Germany, Italy, and the United States remained Vietnam's three largest coffee export markets, accounting for 14.1%, 7.9%, and 6.9% of total exports, respectively. However, export value declined in all three markets, with Germany recording the steepest drop at 21.7%. Meanwhile, China emerged as a bright spot, with export value rising 70.7%, indicating there is still room for market expansion despite intensifying competition.

Pressure comes not only from lower prices but also from the prospect of a sharp increase in global supply. According to the Vietnam Coffee-Cocoa Association (Vicofa), global coffee production in the 2025-2026 crop year could reach about 180 million bags, nearly 8 million more than the previous season. As supply continues to outpace demand, downward pressure on prices is likely to persist in the coming months. In addition, El Nino could bring hotter and drier conditions to many coffee-growing regions in Asia, affecting yields in the 2026-2027 crop year.

Thai Nhu Hiep, Chairman and CEO of Vinh Hiep Company, said market demand is not a major concern because the company secured orders for the entire year. However, profits are under significant pressure from rising logistics costs, particularly higher ocean freight rates and geopolitical uncertainty. "Rising transportation costs are squeezing profits even though production and orders remain stable. Even so, we expect 2026 revenue to remain close to last year's level, while output is projected to increase by about 20%. This is the result of years of preparation, not just efforts made over the past few years," he said.

According to him, that preparation included early investment in traceability, technology, logistics, and human resources, enabling the company to respond proactively to new market requirements.

Regenerative agriculture boosts coffee competitiveness

As opportunities to increase output become more limited, Vietnam's competitive advantage in coffee will increasingly depend on quality, compliance with green standards, and the development of sustainable value chains.

At the recent seminar on regenerative agriculture , Wouter Melis van Ravenhorst, Managing Director of Control Union Vietnam, said regenerative agriculture is no longer a voluntary trend but an essential requirement across global agricultural supply chains. The approach helps restore ecosystems, reduce greenhouse gas emissions, and increase the value of agricultural products, enabling businesses to overcome the "green barriers" in international markets.

Nguyen Van Thiet, Country Manager of the Rainforest Alliance Office in Vietnam, shared the same view, saying this is the right time for the coffee industry to transform in response to increasingly demanding market requirements. A regenerative farm does more than produce crops; it also restores ecosystems, conserves biodiversity, and promotes a more harmonious relationship between people and nature.

One of the leading examples is the NESCAFÉ Plan, launched by Nestlé Vietnam in 2011. According to Pham Phu Ngoc, Head of Nestlé Vietnam's Central Highlands Branch, the greatest challenge is not technology but helping farmers adopt new farming practices in practical and accessible ways.

Regenerative farming focuses on soil, water, and biodiversity. Practices such as maintaining ground cover, using organic fertilizers, balanced fertilization, efficient irrigation, and intercropping can reduce chemical fertilizer use by 20-40%, conserve water, restore ecosystems, and increase farmers' incomes.

According to the program's findings, participating households can increase their income by 30-150% compared with traditional monocropping by reducing input costs and diversifying production. One example is Mai Thi Nhung of Dak Lak Province, whose two-hectare coffee farm, intercropped with pepper and durian, generates more than VND1.2 billion (US$48,000) in profit per harvest through regenerative farming practices combined with digital farm management.

From a policy perspective, Hoang Thi Thu Huong, Senior Project Officer at GIZ, said coffee is a commodity with strong potential under Vietnam's Low-Emission Crop Production Program for 2025-2035, with a vision to 2050. Transitioning to regenerative agriculture will not only help the coffee industry comply with the European Union Deforestation Regulation (EUDR) but also create opportunities to participate in carbon credit markets, generating additional income for producers.

Vietnam's competitive advantage in coffee will depend less on production volume and more on creating value through quality, traceability, emissions reduction, and sustainable development. This shift will not only help the industry adapt to changing market demands but also strengthen the global position of Vietnamese coffee while improving returns for businesses and growers.