As of July 27, Vietnam’s coffee market continues to see bullish domestic prices, defying the downward trend in global coffee futures. The price gap between local and international markets has widened significantly, with domestic Robusta trading approximately VND 12,000/kg higher than the London exchange.
In Vietnam’s Central Highlands, the country’s key coffee-producing region, the average local Robusta price is currently around VND 95,500/kg. This marks a decrease of VND 2,000/kg from the previous session, but still represents a week-on-week gain of VND 1,600/kg, or 1.7%.
Meanwhile, global Robusta futures for September 2025 delivery settled at $3,228/ton (roughly VND 83,700/kg), down $120/ton or 3.6%. Arabica futures also declined, closing at $6,690/ton—down $130/ton compared to the prior week.
The divergence is largely attributed to the end-of-season supply shortage in Vietnam. With limited stock available, traders seeking immediate delivery are willing to pay a premium above futures prices to secure shipments.
In addition to price dynamics, a regulatory issue is drawing attention within Vietnam’s coffee industry. The Vietnam Coffee-Cocoa Association (VICOFA) has submitted a formal petition to the government, requesting clarification on the Value Added Tax (VAT) treatment of green (unroasted) coffee beans.
According to Decree 181/2025/NĐ-CP, effective July 1, 2025, Article 4 stipulates that primary agricultural products undergoing basic post-harvest processing—such as drying, husking, or hulling—are exempt from VAT. This would imply that green coffee beans, which typically undergo minimal processing, should fall under the non-taxable category.
However, Article 19 of the same decree appears to contradict this interpretation by listing green coffee as subject to a 5% VAT rate. This inconsistency has left many businesses confused about their tax obligations.
VICOFA has urged the government to address this regulatory conflict to ensure policy consistency, reduce tax-related risks for exporters, and support Vietnam’s competitiveness in the global coffee market.
With domestic prices maintaining strength while global prices soften, now may be a strategic window for exporters and distributors to restructure inventories or lock in favorable forward contracts. Monitoring ongoing tax policy developments will also be crucial for financial planning in the latter half of 2025.
As the market increasingly shifts toward value-added and sustainable coffee products, industry players are advised to consider investments in post-harvest technologies and certification schemes to meet the growing demands of international buyers.
Tiếng Việt
English
