Vietnam’s coffee: high export volume, modest export value

Vietnam is the world’s second largest coffee exporter, after Brazil. However, Vietnam’s coffee export value remains moderate as exports are mostly coffee beans, or unprocessed coffee.

Vietnam’s coffee: high export volume, modest export value

According to the Ministry of Industry and Trade (MOIT), Vietnam’s coffee exports of the 2014-2015 crop (from October 2014 to September 2015) decreased sharply compared with the previous crop to the last 5-crop deepest low, since 2010-2011.

In 2014-2015, Vietnam exported 1.269 million tons of coffee which brought turnover of $2.648 billion. These were the lowest export volume and export value since 2010-2011.

The 2014-2015 crop also witnessed the sharpest export decrease in many years. Both the export volume and value dropped dramatically by 23 percent and 22 percent, respectively, compared with the previous crop.
Vietnam is the world’s second largest coffee exporter, after Brazil. However, Vietnam’s coffee export value remains moderate as exports are mostly coffee beans, or unprocessed coffee.
In the first six months of 2016, from January 1 to June 15, Vietnam exported 906,000 tons of coffee. Though export volume represented the 50 percent increase over the last year (648,000 tons), Vietnam could only pocket $1.56 billion (it was $1.34 billion in the same period of the last year).

The figures showed that Vietnam’s coffee is meeting difficulties in the world market. Earlier this year, Luong Van Tu, chair of the Vietnam Coffee and Cocoa Association (Vicofa) predicted that domestic demand would be high, while the export volume may decrease by 25 percent in 2016.

A report of the Vietnam Trade Promotion Center (Vietrade) showed that Vietnam exports coffee to 80 markets, of which Germany and the US are the two leading markets which consume 10 percent of Vietnam’s coffee. The next biggest consumers are Spain, Italia and Japan.

Most Vietnamese exports are beans. The other products, roasted and instant coffee, only account for 5 percent of total export volume.

The same thing occurred with the last crop, with coffee bean exports accounting for 92 percent. Instant coffee accounted for 6 percent while roasted exports amounted to one percent only.

However, an analyst commented that Vietnamese exporters now pay higher attention to the export of processed coffee. He cited a Vietrade’s report as saying that Vietnam exported 1.28 million instant coffee bags, an increase of 382,000 bags, or 42.4 percent over the previous crop.

Meanwhile, it exported 475,000 bags of roasted coffee, increasing by 280.8 percent compared to 2013-2014. The figures are expected to reach 1.5 million and 550,000 bags for the 2015-2016 crop.

The signs of export decrease first appeared in 2013. Reuters in August 2013 reported that Vietnam’s coffee industry was in crisis due to bad management, high bank loan interest rates and tightened credit.
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