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Vietnam coffee industry targets US$6 billion export value in 2030

The Viet Nam Coffee and Cocoa Association has targeted a coffee export turnover of US$5-6 billion in 2030, doubling the export value at present.

 

The coffee export value in December, 2021 increased by 26.2 per cent compared to November, 2021.— Photo kinhtedothi.vn

 

The Vietnam Coffee and Cocoa Association has targeted a coffee export turnover of US$5-6 billion in 2030, doubling the export value at present.

To reach this figure, experts believe that the domestic coffee industry needs to increase the proportion of processed coffee products from less than 10 per cent at present to about 25 per cent or even more.

However, increasing the proportion of processed coffee products is a big challenge for the industry due to the level of technology, complex factory operation and awareness of farmers.

At present, Việt Nam has 160 coffee roasting facilities, 11 coffee blending facilities and eight instant-coffee processing facilities. The number of instant-coffee processing facilities is small and most of them are operating below their designed capacity.

On the other hand, Việt Nam's processed coffee brands still have no place in the world market, and branding takes a lot of money and effort.

Deputy Minister of Industry and Trade Đỗ Thắng Hải said that to gain the target of $6 billion, Việt Nam’s coffee industry needed to strengthen connection between production and trade, expand export markets and develop products associated with brand building, towards building a sustainable coffee value chain.

According to the Minister of Agriculture and Rural Development Lê Minh Hoan, if the coffee industry wants to have sustainable development, there must be linkages among provinces or economic regions to form a larger-scale production area and build a brand for Tây Nguyên coffee.

The Ministry of Agriculture and Rural Development (MARD) will continue to implement projects on sustainable development for the domestic coffee industry.

For the Central Highlands provinces, the ministry will set up logistics infrastructure for the coffee industry to create higher coffee value and more processed products. This will form a coffee production chain to increase value of coffee beans and income for coffee producers.

"The Europe-Việt Nam Free Trade Agreement (EVFTA) has opened up great opportunities for the domestic coffee industry. In the future, the ministry will develop its projects on exporting agricultural products to the EU, including coffee. At the same time, it will also have a strategy for Vietnamese agricultural products to enter large distribution systems in Europe," Hoan said.

"If Central Highlands coffee wants to reach out to the world market, it needs to change production, harvesting and processing in accordance with climate change and green consumption of the world market.” 

The coffee industry needs to restructure effectively, including building a specialised cultivation area associated with the development of coffee processing; and application of advanced technology.

It need to promote linkage of raw material areas with processing facilities to create a stable supply of quality goods, meeting the requirements of the market.

The industry must have solutions to remove difficulties and support for farmers and businesses in attracting investment; apply science and technology for production; and improve quality of human resources.

In addition, branding must be paid more attention to. Now, the building and developing of brands have not been realised and effectively implemented by businesses. This is one reason why Việt Nam's agricultural produce, including coffee, are unknown on the world market.

The local enterprises need to survey terms of market share, taste, quality, and price. They must determine the proportion of processed products to build a clear development direction, advertising, marketing and brand positioning strategies.

The State will support enterprises to build and develop their brands through campaigns on communication and image promotion, and training programmes on improving design ability.

Export in 2022

The global coffee price in 2022 is forecast to remain high. The COVID-19 pandemic has limited supply from major coffee producing countries such as Colombia and some other South American countries, according to the association. Congestion at international ports is also predicted to be prolonged.

Currently, some roasters plan to mix Arabica and Robusta coffee to lower the selling price due to the lack of Arabica coffee supply.

In the long term, this can change consumer tastes and make customers more accustomed to drinking Robusta coffee, and help Việt Nam increase Robusta coffee exports.

Meanwhile, European, American and Asian consumers will also gradually know and like Vietnamese coffee beans.

Experts said that if local enterprises have strategies to enter strict export markets such as the EU, the US and Japan, they will be promising markets for Vietnamese coffee exports.

The coffee industry's strategy in the future is to develop processed coffee products, such as roasted coffee and instant coffee, rather than focusing on the export quantity of green coffee as at present.

According to the experts, despite many challenges, developing the coffee processing industry will be a key solution not only to increase export value but also to help the coffee industry have sustainable development.

Deputy Minister of Industry and Trade Hải said that in recent years, trade promotion activities had been enhanced to develop the export market for coffee products.

Under the National Trade Promotion Programme, the Ministry of Industry and Trade (MoIT) has coordinated with localities producing coffee, organisations and enterprises to implement trade promotion activities, such as participation in specialised exhibition of agricultural produce and food at home and abroad.

In 2021, Việt Nam's coffee exports reached 1.52 million tonnes, worth of about $3 billion, down 2.7 per cent in volume, but up 9.4 per cent in value year on year. Last year, Việt Nam mainly exported Robusta coffee.

According to the MoIT's Import and Export Department, loosening social distancing measures due to COVID-19 has created more favourable conditions for customs clearance, and higher coffee demand on the world market, which were the factors to make Việt Nam's coffee exports recover at the end of 2021.

The coffee exports in December 2021 reached 130,000 tonnes, earning $305 million, up 21 per cent in volume and 26.2 per cent in value compared to November 2021.

The average export price of Việt Nam's coffee in December 2021 reached $2,344 per tonne, the highest level since June 2017. The price increased by 4.3 per cent month-month and 28.7 per cent year-on-year.

The average export price for the whole of 2021 was estimated at $1,969 per tonne, up 12.4 per cent compared to 2020.

However, to increase the export turnover, the core factor is still the development of processed coffee products. In 2021, Việt Nam's deep-processed coffee exports were only 121,000 tonnes, earning $433 million. Thus, the volume only accounted for 8 per cent, while the export turnover of processed coffee products accounted for 15 per cent of the total turnover.

Source: VNS

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