Vietnam & Global Coffee and Cashew Markets 2025

Executive Summary

The year 2025 was defined by tight supply conditions, price volatility, and structural shifts across both coffee and cashew markets. Vietnam remained central to global supply dynamics: it reinforced its position as the world’s leading Robusta coffee powerhouse and the most important cashew processing and export hub.
 

In coffee, global prices remained elevated due to weather-driven constraints and limited Robusta availability. Vietnam’s coffee output showed signs of recovery moving into the next cycle, supported by stronger farmgate incentives and improved cultivation investment. According to USDA estimates and forecasts, Vietnam’s coffee production is expected to rise from 29 million bags (MY 2024/25) to 31 million bags (MY 2025/26), highlighting a supply rebound narrative entering 2026.
 

In cashew, Vietnam’s export engine remained strong, with 2025 export value tracking toward record highs, supported by robust demand from China and stable demand in traditional markets. However, profitability remained under pressure due to high raw nut import costs, strong competition for African supply, and rising operational complexity.
 

Looking into 2026, both markets are expected to remain volatile. Coffee will likely see price normalization but not a return to “cheap coffee,” while cashew will remain a margin-sensitive market where procurement strategy and value-added product positioning will determine winners.
 

1. Coffee Market 2025: Vietnam and Global Overview
 

1.1 Global Coffee Market in 2025
 

The global coffee market in 2025 was shaped by three major forces:

1. Weather volatility impacting yields and quality
2. Tight inventories and supply chain risk premium
3. Resilient demand, especially in Asia

FAO’s 2025 coffee market report highlights that price strength was supported by supply constraints and continued uncertainty around production recovery timelines, especially for key origins. This kept market sentiment highly sensitive to any new weather or crop signals.
 

Meanwhile, the International Coffee Organization (ICO) continued to document elevated market pricing dynamics and trade shifts through its Coffee Market Reports and statistical updates.
 

1.2 Vietnam’s Role in the 2025 Coffee Market
 

Vietnam is the world’s most important Robusta supplier, meaning its production and export conditions directly influence global pricing—especially for instant coffee and commercial blends.
 

USDA’s Vietnam Coffee Annual provides a clear signal of the market direction:

• MY 2024/25 production: 29 million bags
• MY 2025/26 forecast: 31 million bags
• This rebound is linked to stronger investment incentives from high prices and improved farm-level management.

Vietnam’s competitive advantage is also expanding beyond raw beans. USDA expects continued growth in Vietnam’s exports of roasted and soluble coffee, supported by demand expansion in Asia and increasing industrial-scale processing capability.
 

1.3 Vietnam Coffee Exports: Value Growth in 2025
 

Vietnam’s coffee exports in the 2024/2025 crop-year window generated record export revenue. Government-linked reporting stated that in the first 10 months of the 2024/2025 crop year (Oct 2024–Jul 2025), Vietnam exported approximately 1.35 million tons valued at $7.5 billion, with full-year expectations to exceed $8 billion by the end of September 2025.
 

This reflects a market environment where:

• Export volumes remained strong
• Unit prices increased significantly
• Buyers prioritized supply security

2. Coffee Market Drivers in 2025 (What Actually Moved the Market)
 

2.1 Weather and Climate Risk
 

The single most important driver in 2025 was the market’s reaction to weather disruptions. Mainstream coverage emphasized how climate conditions in key origins increased price pressure and uncertainty, especially in Brazil and other major producing regions.
 

This factor matters not only because it reduces output, but because it increases the probability of:

• uneven bean size and quality distribution
• delayed harvest cycles
• contract risk and default risk
• higher price volatility across futures and physical markets

2.2 Robusta Tightness and Global Blend Shifts
 

As Robusta prices increased and supply remained tight, roasters and manufacturers adjusted blends and sourcing strategies. However, substitution between Arabica and Robusta is limited by:

• product taste profiles
• brand consistency requirements
• regulatory or labeling requirements in some markets

This made the market less elastic than many expected, keeping prices supported even during short periods of demand softening.
 

2.3 Demand Resilience and Growth in Asia
 

Despite inflationary pressure in many economies, coffee demand stayed resilient. Vietnam is well positioned to benefit from this trend because:

• Asia’s consumption is growing
• instant coffee demand is expanding
• Vietnam’s processing exports (soluble and roasted) are improving in scale

3. Cashew Market 2025: Vietnam and Global Overview
 

3.1 Vietnam’s Cashew Export Performance in 2025
 

Vietnam continued to lead global cashew kernel processing and exports.
 

Key 2025 performance indicators included:

• First 7 months of 2025: Vietnam exported 413,000 tonnes worth $2.8 billion, with China emerging as a major growth market.
• First 3 quarters of 2025: exports reached 554,760 tons, valued at $3.77 billion, supporting expectations that Vietnam could reach a record $5 billion export year.

China’s rapid rise as a destination market is strategically important because it diversifies demand beyond the US and EU, but it also introduces new competitive dynamics in pricing and buyer behavior.
 

3.2 The Real Cashew Story of 2025: High Throughput, High Costs
 

While export volumes and values were strong, the industry faced structural margin pressure.
 

End-of-year market commentary described Vietnam’s cashew sector as operating with:

• high throughput
• high procurement costs
• limited margin for error

This reflects Vietnam’s dependency on imported raw cashew nuts (RCN), primarily from Africa and neighboring supply regions.
 

3.3 Global Supply and Policy Shifts
 

Global cashew supply is increasingly influenced by policy decisions in producing countries. Several origin countries in West Africa have been pushing for:

• more domestic processing
• export restrictions or tighter export controls
• new licensing systems

Industry analysis highlights that West Africa, Vietnam, and Cambodia are reshaping the global cashew map—an important strategic risk for Vietnam’s processors and exporters.
 

4. Cashew Market Drivers in 2025 (Why Margins Were Under Pressure)
 

4.1 Raw Nut Procurement Competition
 

Vietnam’s processing capacity is extremely strong, but the system depends on stable access to RCN.
 

In 2025, raw nut procurement became more competitive due to:

• increased global processing investment
• policy pressure in origin countries
• higher financing and logistics costs

This pushed up input costs faster than many kernel export prices could adjust.
 

4.2 Demand Growth vs Price Sensitivity
 

Cashew demand remained healthy, but the category is price sensitive in many markets. As kernel prices rise, buyers may:

• reduce order sizes
• switch to alternative nuts
• negotiate harder on contract terms
• shift to lower grades or smaller sizes

This creates a “high volume but low margin” environment.
 

4.3 Market Concentration Risk
 

As China grows in importance, Vietnam benefits from stronger volume pull. However, concentration risk increases if:

• one market becomes dominant
• buyer power strengthens
• price negotiation becomes more aggressive

A balanced export portfolio remains essential.
 

5. 2026 Forecast: Coffee Market Outlook
 

5.1 Base Scenario (Most Likely)
 

Coffee prices ease but remain structurally high, with ongoing volatility.
 

Reasons:

• Vietnam production is forecast to rise to 31 million bags (MY 2025/26), improving supply availability.
• Global supply is expected to improve entering 2026.
• Climate risk remains persistent, maintaining a volatility premium.

In this scenario, the coffee market becomes less extreme than 2025 but remains unstable, with periodic spikes driven by weather or logistics shocks.
 

5.2 Bull Scenario (Higher Prices)
 

Coffee prices rise again if:

• weather disruptions reduce output in Brazil or Vietnam
• inventories fail to rebuild
• demand growth remains stronger than expected

This scenario would likely bring renewed focus on supply security contracts and long-term sourcing partnerships.
 

5.3 Bear Scenario (Price Correction)
 

Prices fall more sharply if:

• production rebounds strongly across major origins
• demand weakens in Europe/US
• substitution and downtrading accelerate

However, even in a bear case, prices may remain above long-term historical averages due to structural production constraints and cost inflation.
 

6. 2026 Forecast: Cashew Market Outlook
 

6.1 Base Scenario (Most Likely)
 

Vietnam exports remain strong, but margins stay tight.
 

Vietnam’s cashew sector will continue to succeed on volume and global relevance, but profitability will depend on:

• raw nut procurement strategy
• financing and working capital efficiency
• product mix optimization

6.2 Bull Scenario (Improved Margins)
 

Cashew profitability improves if:

• RCN prices stabilize
• origin export policies become more predictable
• kernel demand strengthens while buyers accept higher prices

In this case, Vietnam’s processors benefit from stronger price transmission and improved planning ability.
 

6.3 Bear Scenario (Procurement Shock + Demand Softening)
 

Margins compress further if:

• origin countries restrict exports or raise compliance costs
• raw nut prices spike unexpectedly
• buyers reduce purchasing due to higher retail prices

This scenario would force some processors to reduce throughput or shift toward higher-margin niche products.
 

7. Strategic Recommendations for KAI Farm and Industry Stakeholders
 

7.1 Coffee Strategy: Shift from Commodity to Value
 

To win in 2026, the best-positioned coffee businesses will focus on:

• soluble and roasted exports
• quality consistency and traceability
• long-term partnerships rather than spot exposure
• climate-smart farming and yield stability programs

Vietnam’s growing role in processed coffee exports provides a strong foundation for long-term value capture.
 

7.2 Cashew Strategy: Procurement is the Core Competitive Advantage
 

Cashew competitiveness in 2026 will depend less on processing capacity and more on raw nut security.
 

Key actions include:

• multi-origin sourcing strategy
• long-term procurement contracts where possible
• intake quality control and standardization
• flexible production planning based on raw material cost signals

7.3 Risk Management: Treat Volatility as Permanent
 

Both coffee and cashew markets are transitioning into a “new normal” of:

• climate uncertainty
• policy risk
• cost inflation
• demand fragmentation

Success will require stronger data monitoring, scenario planning, and value-chain integration.
 

Conclusion

The year 2025 confirmed that both coffee and cashew are no longer “stable commodity markets.” They are now strategic agricultural industries shaped by climate volatility, policy shifts, and global competition for raw materials.
 

For Vietnam, this creates both opportunity and risk:

• Coffee has a clear pathway to higher value through processing and branded formats.
• Cashew remains globally dominant, but margin sustainability will require stronger procurement resilience and product differentiation.

In 2026, the businesses that win will be those that move beyond volume and focus on value, stability, and supply security.
 

Hoang Tuan
Data Analysis Team, KAIFarm®