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Is Chinese coffee obstructing Vietnamese coffee exports?

VietNamNet Bridge - Vietnam saw a sharp decrease in coffee exports in the first four months of the year, which is attributed to lower demand from the world’s roasters and increased output from China.

VietNamNet Bridge - Vietnam saw a sharp decrease in coffee exports in the first four months of the year, which is attributed to lower demand from the world’s roasters and increased output from China.



A Ministry of Agriculture and Rural Development (MARD) report showed that Vietnam exported 466,000 tons of coffee in the first four months of 2015, worth $970 million, a decrease of 41 percent compared with the same period last year.

Nguyen Quang Binh, director of Chanh Tinh Anh Coffee Company, noted that China has been trying to develop a coffee growing area to increase output for domestic sales and exports.

An official of Yun Nan province said in a recent interview that the coffee growing area in the province reached 125,000 hectares from 40,000 hectares some years ago, which is equal to 85 percent of the total coffee growing area in China.

Binh said China had been a big importer (it imports 30,000 tons of coffee from Vietnam every year) until last year when it began exporting coffee beans and instant coffee to Germany, Japan, South Korea and the US.

According to Pham Ngoc Bang, deputy director of Dak Man, a coffee joint venture, Chinese grow Arabica, while 90 percent of coffee plants grown in Vietnam are Robusta. Chinese sell coffee at lower prices than Vietnam in an effort to build a Chinese coffee brand to compete with existing large exporters – Vietnam, Brazil and Columbia. 

Also according to Bang, China in previous years imported 50,000-100,000 tons of coffee a year across the border gate, but imports in recent years have been inconsiderable. This is evidence showing that China is trying to develop a coffee growing area in Yunnan province.

Analysts noted that Chinese coffee is still far from being a threat to Vietnamese coffee because China is not a strong brand at all. However, China still could be a formidable rival to Vietnam in the world market once Chinese businesses join forces with the world’s big roasters and instant coffee manufacturers. Meanwhile, Vietnam mostly exports unprocessed coffee.

Binh of Chanh Tinh Anh Company said Vietnam sells coffee beans and therefore, cannot earn big money. Meanwhile, the coffee value could be four to five times higher if it is sold as a processed product.

Therefore, if Vietnam does not intend to make products with high added value, it will forever be a raw material supplier to the world’s roasters. Meanwhile, China is step by step becoming a processor and exporter in an aim to earn big money. 

Nguyen Huu Thang, chair of Hapro, a trading corporation, agrees that Vietnamese companies should increase their capacity of making roasted and instant coffee, and they need support from the state to do this.



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