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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Vietnam attempts to increase export value of coffee

Tuesday, August 19, 2014 > 07:13:45
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(Shanghai Daily)

Vietnam, one of the world's largest coffee exporters, is now striving to lift export value of coffee, as most of the country's exported coffee was unprocessed, bringing little profit.

Over the past decade, Vietnam has witnessed a surge in coffee cultivation areas, productivity and output. In 2012, Vietnam's coffee output hit 1.3 million tons, 14 times higher than that of 1990 while export revenue reached 2.7 billion U.S. dollars, 29 times higher than 1990.

In April, 2014, Vietnam Coffee-Cocoa Association (VICOFA) forecast the country will sell some 1.5 million tons of coffee to world market in 2014 to earn 3 billion U.S. dollars.

Vietnam's coffee has been shipped to over 80 countries and regions worldwide, said VICOFA.

A report on evaluating Vietnam's export potentials released by the Vietnam's Ministry of Industry and Trade late July showed that Vietnamese coffee has high competition thanks to suitable environment and climate conditions, low production cost, and high output. However, the quality of Vietnamese coffee remains low due to poor processing, drying equipment and outdated harvesting technology.

Besides, the brand of Vietnamese coffee is not widely recognized while the country's exporters lack marketing skills.

With these weaknesses, Vietnamese coffee is usually sold at lower price than average world price, said Bao Hai Quan (Customs News), an online newspaper of Vietnam Customs on Monday.

Nguyen Trong Thua, head of the Agro-Forestry Processing and Salt Industry Department under Vietnam's Ministry of Agriculture and Rural Development (MARD) was quoted by Bao Hai Quan on Monday as saying that only 5 percent of total Vietnam's coffee export volume was processed.

Thua attributed this fact to ineffective processing and preserving system of Vietnam.

"The weakest point of the coffee sector is lack of connectivity among production, processing, preserving stages and loose link between farmers and enterprises," assessed Thua.

Recently, MARD assigned the Agro-Forestry Processing and Salt Industry Department to draft plans on coffee processing and preserving system till 2020 with its orientation to 2030.

According to the draft, there will be more export potentials for the sector if Vietnamese coffee is processed by advanced technology, meets high criteria of quality and has feasible marketing strategy, said Thua.

The draft maps out measures to step by step increase export value of Vietnamese coffee by building high-quality coffee production areas, said the official, adding that exporting companies should coordinate with localities to seek stable coffee production areas, and sign contracts of buying products.

In addition, trade promotion activities and market expanding efforts should be further enhanced, said Thua.

The draft set a target that by 2020, export revenue for Vietnamese coffee will reach 3.5 billion U.S. dollars annually, while 100 percent of processed coffee will meet with national and international criteria on hygiene and food safety.

The rate of processed coffee is set to reach 40 percent in 2015, and 70 percent in 2020, from the current five percent of the total coffee export volume.

According to statistics by MARD, in the first seven months of 2014, Vietnam exported some 1.12 million tons of coffee, pocketing 2.31 billion U.S. dollars, up 26.9 percent in volume and 21.9 percent in value year-on-year.

Average export price of Vietnamese coffee during the period was 2,043 U.S. dollars per ton, down 4.84 percent year-on-year.

Germany and the United States continued to be the major importers of Vietnam's coffee with respective market shares of 14. 02 percent and 10.1 percent during the period.


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