VINAGRI News - Vietnam’s domestic coffee prices rose sharply by VND 1,000/kg on February 26 to VND 96,400 - 97,100/kg, tracking strong gains in London robusta futures. While short-term technical recovery supports prices, improving global supply prospects, particularly from Brazil and Vietnam, continue to pose medium-term downside risks.
Summary:
> Domestic coffee prices in Vietnam rose VND 1,000/kg to VND 96,400 - 97,100/kg
> London May 2026 robusta futures climbed to $3,703 per ton
> Local prices are about VND 400/kg above London futures equivalent
> Short-term technical rebound supports prices
> Record Brazil crop outlook, strong Vietnam exports and rising inventories weigh on medium-term outlook
> High volatility expected amid currency and weather uncertainties
Vietnam’s domestic coffee prices continued their upward momentum on February 26, rising by VND 1,000/kg to a range of VND 96,400 - 97,100 per kilogram across key producing regions.
At the close of trading on Wednesday (February 25), robusta coffee futures for May 2026 delivery on the London exchange surged to $3,703 per metric ton, up 1.73% (+$63/ton) compared to the previous session. Other nearby contracts also posted strong gains, with the March 2026 contract rising 2.62% (+$96/ton) to $3,759/ton, while the July 2026 contract increased 1.68% (+$60/ton) to $3,570/ton.
Converted into Vietnamese dong, the May 2026 robusta futures price is currently equivalent to approximately VND 96,600/kg, based on an exchange rate of 1 USD = VND 26,102.03. With domestic robusta averaging around VND 97,000/kg, local prices are trading about VND 400/kg higher than the London May 2026 futures contract, equivalent to roughly $15.32 per ton.
The global coffee market remains highly volatile, influenced by a complex mix of fundamental and financial factors. As a result, accurately forecasting the May 2026 robusta contract for the February 26 session is challenging. However, several scenarios can be considered based on current market dynamics.
First, short-term price action indicates a technical rebound after robusta hit a six-and-a-half-month low earlier in the week. The $63 gain in the May 2026 contract on February 25 suggests that bargain buying remains active following a month-long decline.
Second, medium-term pressure factors remain evident. Brazil’s crop forecasting agency Conab recently projected a record 2026 coffee harvest, while Vietnam’s coffee exports have surged and ICE-monitored inventories have recovered. These developments point to improved global supply conditions and could weigh on prices if the market continues to price in expectations of oversupply.
Third, currency movements and investor sentiment warrant close attention. The Brazilian real has strengthened, reaching its highest level in 1.75 years against the US dollar, which may discourage aggressive export selling by Brazilian farmers. Additionally, fluctuations in the US dollar index and speculative fund flows on ICE London will likely influence intraday volatility.
Under current conditions, the May 2026 robusta contract on ICE London may trade within a narrow-to-moderate range on February 26. If technical buying persists, prices could test the $3,730 - 3,780 per ton resistance zone. Conversely, increased profit-taking could push prices back toward support levels around $3,640 - 3,680 per ton. Volatility is expected to remain elevated as the market stays highly sensitive to weather developments and Brazilian production estimates.
Overall, the very short-term trend favors a technical recovery, but downside risks remain significant given medium-term fundamentals pointing to more abundant global supply.
NPK/ Vinagri News
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