This episode highlights rising tensions and price volatility in the global coffee market.

• In Vietnam, domestic coffee prices have surged sharply, ranging between 124,100 and 124,400 Vietnamese dong per kilogram across major producing regions. This spike aligns with global price increases, driven by speculative buying and a substantial rise in Robusta futures. From January to July, Vietnam's coffee exports grew by 7.6 percent year over year, generating $6 billion in revenue, a 65 percent increase from the previous year. However, the European Union’s anti-deforestation regulation presents challenges, particularly for smallholder farmers, due to its recordkeeping and land certification requirements.
• Brazil faces market pressure from a severe drought affecting key Arabica-producing regions like Minas Gerais. The country saw a 20.4 percent year-over-year drop in green coffee exports in July. Compounding the issue is a newly implemented 50 percent U.S. tariff on Brazilian coffee, which has disrupted supply chains and elevated coffee prices in the U.S. As Brazil accounts for a significant portion of U.S. coffee imports, this policy shift has led to contract cancellations and market uncertainty.
• Globally, coffee futures remain on an upward trajectory, heavily influenced by speculative buying, drought concerns in Brazil, and evolving trade restrictions. Weather unpredictability further complicates production forecasts, even as the U.S. Department of Agriculture projects record global output for the 2025-2026 cycle. The market remains sensitive to these intersecting pressures, shaping prices and international trade flows.