The market is awaiting clearer information regarding potential U.S. tariffs. Rising trade tensions and possible retaliatory measures are increasing global economic instability.

Robusta prices have slightly rebounded after previous sharp declines, while Arabica continues its downward trend.

Market Insight:
Experts note that due to the potential U.S. tariffs on Vietnamese goods, some American importers have requested Vietnamese exporters to delay shipments and avoid signing new contracts. Other markets are also holding off on contracts, waiting for prices to drop if tariffs are imposed.
This situation is directly impacting domestic production, with increased inventory levels, liquidity issues for exporters, and disruptions in raw material purchasing — all contributing to recent price declines.
Investors are closely watching trade disputes arising from President Donald Trump's tariff policies. Retaliatory measures are escalating the risk of a global trade war, adding further uncertainty to the global economy.
Experts believe that if tariffs are raised, coffee prices in the U.S. will surge, establishing a new higher price level that could help the coffee market recover.

In response to the news that the US may apply a 46% tax rate to Vietnamese goods, coffee businesses and cooperatives have found solutions to respond. Mr. Tran Dinh Trong, Director of Ea Tu Fair Service Cooperative, in Buon Ma Thuot city, expressed concern at the news that the US will impose a 46% tax on Vietnamese goods.

Although it is not known specifically how much tax is applied to coffee, Mr. Trong said that this will affect the industry to some extent.

Currently, an order of an exporting unit to the US is being delayed by one month to wait for the negotiation results between Vietnam and the US. If the 46% tax rate is applied, the coffee industry will be greatly affected.

Mr. Trong said that the cooperative is willing to reduce prices, even accept that there is no interest, to keep partners. Because increasing taxes will lead to a series of other problems, reducing domestic coffee prices, affecting growers, purchasers and exporters.

In the long term, Mr. Trong is looking for a solution to cope by reducing production costs. Mr. Trong will also expand his customer base and aim for sustainable farming, reducing dependence on one crop.

Also specializing in coffee production and trading, Mr. Le Dinh Tu, Director of Minudo Farm Care Company Limited, in Ea Kao commune, Buon Ma Thuot city, said that the industry will be greatly affected if the US imposes high taxes.

Because most of Vietnamese coffee, especially Dak Lak coffee, is being exported in raw form. The tax will increase costs and force partners to find other sources of supply. This also reduces the competitiveness of Vietnamese coffee in the US market.

Regarding this, Mr. Tu proposed short-term and long-term solutions. In particular, Mr. Tu focuses on cutting costs, optimizing production and increasing product value.

In particular, Mr. Tu is improving customer experience services at the farm to increase revenue and expand domestic markets.He is also diversifying products and expanding markets to many other countries.
Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association, said that Vietnamese coffee is present in more than 100 countries and territories.

In 2024, the US will account for about 8.6% of Vietnam's total coffee beans exports, the third largest market after the European Union (41%) and Japan (8.2%).

Although not the largest market, the US is still very important because it is a market for high-end coffee consumption with high added value. In particular, deep-processed products such as roasted and ground coffee and instant coffee.

Therefore, if the US imposes high tariffs, the coffee industry will be affected. Mr. Minh hopes that the Vietnamese Government will successfully negotiate with the US on the tax rate.

In the long term, the coffee industry may shift to focus on other markets such as the EU, China, Japan, South Korea, etc.

T.Huong

Source: Vitic