The coffee industry should step up the digitalisation of the value chain to get ready for the European Union (EU)’s Deforestation Regulation (EUDR) to maintain and expand exports to this bloc, according to the Việt Nam Trade Office in Belgium.

The trade office said that the law passed by the European Parliament on May 16 and taking effect from December 30, 2024, required companies to demonstrate their products weren’t sourced from deforested land or land with forest degradation.

The law targets cattle, cocoa, coffee, palm oil, rubber, soy and wood as well as commodities fed by or made using these products such as leather, chocolate, printed paper and furniture.

As a major coffee exporter to the EU, Việt Nam should get prepared for the law to maintain and expand coffee exports to the bloc, raising the pressing need for digitalisation of the value chain.

The trade office said that enterprises would have more than one year left to comply with the law. For companies of micro and small sizes, the time was longer.

For the coffee industry, exporters must ensure that the products weren’t sourced from deforested land or land with forest degradation to be eligible for entering the EU market.

The integration of digital technology was critical to meeting the regulations on deforestation–free products, the trade office stressed.

An important target of the law was to increase the origin traceability, which said that it is the responsibility of the operators (or traders that are not SMEs) to collect the geolocation coordinates of the plots of land where the commodities were produced.

If the operators cannot collect the geolocation of all plots of land contributing to a shipment, then the products could not be placed on the EU market or exported from it.

Operators (and traders which are not SMEs) and enforcing authorities could cross-check the geolocation coordinates against satellite images or forest cover maps to assess if the products meet the deforestation-free requirement of the regulation.

According to the Ministry of Agriculture and Rural Development, origin traceability to every plot of land was the biggest challenge to the coffee industry in complying with the EUDR.

It would be costly if each enterprise developed its own geolocation system which many operators could not afford.

Thus, Việt Nam would need to develop a national database about forest and coffee plantation areas.

The ministry was drafting a national-level action plan for the coffee industry to adapt to the EUDR which would focus on enhancing the public–private partnership to support the industry towards transparent and sustainable development.

The ministry said that EUDR provided not only opportunities but also challenges for Việt Nam’s coffee industry.

Việt Nam has banned the exploitation of natural forests since 2016. Currently, the rate of deforestation for coffee plantations in Việt Nam was below 0.1 per cent.

However, the Việt Nam Coffee – Cocoa Association said that attention must be paid to preventing deforestation for coffee production, especially when coffee prices increased strongly from the beginning of this year.

Coffee prices were fluctuating around VNĐ66,000-67,000 per kg in the domestic market, compared to the band of VNĐ35,000-40,000 recorded during the past decade.

The association said that the EU was a major coffee export market of Việt Nam which accounted for around 40 per cent of Việt Nam’s coffee export each year.

Statistics from the agriculture ministry showed that the EU imported around 3.05 million tonnes of coffee from the world in 2022, worth around 12.81 billion euro. Việt Nam was the second largest coffee exporter to the EU outside the bloc, after Brazil, with an export volume of 662,000 tonnes, worth 1.54 billion euro.

According to Eurostat, EU imported coffee worth $7.1 billion from the world in the first four months of this year, a fall of 1.7 per cent against the same period last year. However, the EU’s coffee import from Việt Nam increased by 34.1 per cent to reach $601 million, according to 8.86 per cent of the EU’s coffee import.

There were about 710,000ha of coffee plantation areas in Việt Nam with an output of more than 1.84 million tonnes per year, mostly in five Tây Nguyên (Central Highlands) provinces. — VNS