Coffee exports target doubling to US$6 billion

Vietnam is the world’s second-largest producer and exporter of coffee beans, after Brazil. To maintain this position and increase the added value of the coffee sector, simultaneous measures must be taken to raise yields and improve coffee product quality. 

Exports top US$3 billion

According to the Vietnam Industry and Trade Information Center under the Ministry of Industry and Trade, Vietnam exported 140,000 tonnes of coffee worth US$287 million in December 2017, up 39.3 percent in volume and 32.4 percent in value compared with November. Annual exports reached more than 1.42 million tonnes in volume and nearly US$3.21 billion in value, down 20.1 percent in volume and 3.7 percent in value compared with 2016.

In December 2017, Vietnam exported coffee at an average price of US$2,050 per tonne, down 7.9 percent compared with December 2016. The average price for the whole year was US$2,257 per tonne, up 20.5 percent compared with 2016.

Germany was the largest European importer of Vietnamese coffee in 2017, accounting for 15.3 percent of total export volume and 14.6 percent of total export value (in 2017, Germany imported 195,774 tonnes of Vietnamese coffee worth US$425.74 million).

Vietnamese coffee’s share in the US market increased in 2017, taking Vietnam to the fifth position among coffee exporters to this market. The US expenditure on coffee imports from Vietnam in 2017 was 45.2 percent higher compared with 2016.

According to the Vietnam Coffee and Cocoa Association (Vicofa), the coffee sector has generated jobs for millions of workers and created billions of US dollars in annual revenue from exports to more than 80 countries and territories worldwide. Currently, Vietnamese coffee holds a global market share of about 15 percent, and Vietnam is the world’s second largest exporter of coffee beans.

Strengthening global position

Minister of Agriculture and Rural Development Nguyen Xuan Cuong recently signed Decision 4653/QD-BNN-KHCN approving a framework scheme to develop high quality Vietnamese coffee as a nationally recognized product in the 2018-2023 period, with a vision towards 2030.

The scheme proposes support policies aimed to help increase yields, improve quality and enhance the added value of coffee products nationwide until 2020, giving priority to the Central Highlands, North Central region, midlands and mountainous areas in the north. Its goals include promoting the linkages between farmers and businesses to develop high-quality commercial coffee growing areas and upgrade processing, storage and preservation facilities; increasing incomes for coffee farmers by enhancing the product value.

Under the plan, farmers’ average income is expected to grow five percent by 2020 and seven percent by 2023 compared with the 2013-2014 crop. Total budget for the scheme is VND170 billion (VND110 billion from the state budget, and VND60 billion from businesses, farmers and credit institutions).

The scheme also focuses on enhancing the competitiveness of domestic coffee production and supply chains in the regional and global markets; and raising the export price of Vietnamese coffee to the level of products of other countries in the region and worldwide by 2020.

Vicofa President Luong Van Tu believes there’s still room for the coffee sector to increase its added value. In his opinion, the sector needs to seek large capital resources and take simultaneous measures to increase crop yields and improve the quality of processed products. The coffee sectors should strive for two major goals: 1) strengthening Vietnam’s position as the world’s second-largest exporter of coffee beans; and 2) increasing the export of processed products to raise the export revenue to US$6 billion by 2030, double the result of 2017.

Tu also highlighted the necessity of developing high-yield and quality coffee varieties that can withstand droughts and climate change. Vicofa has asked the government to establish a specific fund for coffee sector development and promulgate standards for roasted, ground and instant coffee.

Experts share the opinion that to develop in a sustainable manner, the coffee sector needs to intensify brand building and trade promotion activities, increase domestic sales and improve the quality of coffee beans.