Internal, external factors challenge Vietnam’s coffee exports

Numerous challenges are facing the export of Vietnamese coffee, which has continually declined in both volume and value since the beginning of this year.
Internal, external factors challenge Vietnam’s coffee exports ảnh 1Numerous challenges are facing the export of Vietnamese coffee, which has continually declined in both volume and value since the beginning of this year. (Photo: hanoimoi.com.vn)
Hanoi (VNA) – Numerous challenges arefacing the export of Vietnamese coffee, which has continually declined in bothvolume and value since the beginning of this year.

In the first four months of 2019, 629,000 tonnesof coffee worth 1.1 billion USD was shipped abroad, down 13.4 percent in volumeand 22.5 percent in value year-on-year.

The export is forecast to continue the downtrendin May as domestic and global coffee prices are still falling, according to theAgro Processing and Market Development Department under the Ministry ofAgriculture and Rural Development.

The department’s Acting Director Nguyen QuocToan said domestic coffee prices are currently below 30,000 VND (1.28 USD) perkg – the lowest in a decade. Prices in international markets have also droppedby 500 USD per tonne to 1,295 USD per tonne since the start of May.

He explained that global coffee prices have beenaffected by US-China trade relations, which has subsequently dragged downprices in many countries, including Vietnam.

Additionally, coffee exports have also facedfierce competition from other rivals. 

Secretary-General of the Vietnam Coffee-CocoaAssociation Nguyen Viet Vinh said over the last four months, coffee exports tothe US fell by 19.8 percent, and 13 percent for those to Germany. Vietnamesecoffee now has to compete with Brazilian and Colombian products in these twotraditional markets.

Coffee exports to many other destinations havealso been declining sharply, including India (down 33.7 percent), Algeria (25.2percent), France (14 percent), Japan (12.5 percent), and the Republic of Korea(11.2 percent).

Minister of Agriculture and Rural DevelopmentNguyen Xuan Cuong partly attributed the decrease to the limited quality ofVietnamese coffee, a lack of diverse products, and the sector’s inactiveresponse to market fluctuations.

He said the coffee sector needs to change itsproduction mode, adding that amid droughts decreasing crops and therefore coffeeoutput, it is now urgent to apply technology in production so as to ensureproduct quality.

Meanwhile, Vietnam should also develop specialtyproducts for export, said Chairman Thai Nhu Hiep of the Vinh Hiep Co. Ltd – acoffee processor and exporter in the Central Highlands province of Gia Lai.

Hiep noted that specialty products make up about2 percent of the global coffee output, but their added value is five to 10times higher than that of normal ones. There are many regions producing suchquality coffee in Vietnam.

Minister Cuong said in the time ahead,new-generation free trade agreements like the Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free TradeAgreement (EVFTA) will open up numerous new chances for Vietnamese coffeethanks to tariff cuts, especially those for processed coffee.

Vietnamese businesses should make use of theseopportunities to improve the quality of their coffee, diversify products, andfocus on processed coffee with high value to expand the market and give thisstrategic commodity the recognition it deserves, the official added. –VNA
VNA

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