Instant coffee, instant results

Coffee exports are expected to reach US$3.5 billion in 2018, Luong Van Tu, Chairman of the Vietnam Coffee - Cocoa Association (VICOFA) recently told Vietnam Economic News’ Phuong Lan.

Why is the coffee exports’ value growth lower than quantity growth?

Arabica and Robusta coffee prices have reached their lowest levels of the past 12 and five years, respectively. As a result, despite a quantity increase of over 20 percent, Vietnam’s coffee export value in the first 10 months of 2018 grew at the same pace as in the same period last year.

However, Vietnam has increased exports of ground roasted and instant coffee according to its processed coffee export promotion policy. Processed coffee has high added value with prices of VND70-100 million per tonne compared to VND32-36 million per tonne in coffee beans. China is emerging as one of the biggest importers of Vietnamese coffee beans and instant coffee. Increasing coffee export volume and diversifying coffee exports and markets have helped Vietnam maintain stable coffee export value despite the sharp drop in prices.

Vietnam is still exporting raw coffee and importing processed coffee. What is your assessment of this?

Most coffee produced in Vietnam is of the Robusta variety. Since it is bitter and less aromatic, importers dilute it with 30 percent Arabica coffee to create bitter, aromatic coffee products.

Actually, Vietnam’s ground roasted and other processedcoffee exports have increased. Vinacafe, Trung Nguyen, and Nestle have become the biggest producers of instant coffee in Vietnam. The Tin Nghia Coffee Company is expected to put into operation by the end of this year an instant coffee production line in Dong Nai Province with an annual capacity of 10,000 tonnes.

How much will Vietnam earn from coffee exports in 2018?

Vietnam’s coffee production has been developing rapidly, with coffee exports accounting for about 10 percent of Vietnam’s farm produce, forest product and seafood export revenues. In addition to Vietnam’s famous brands, such as Vinacafe and Trung Nguyen, many additional coffee enterprises have been established to benefit from free trade agreements that Vietnam has signed. They have kept pace with modern trade trends and efficiently utilized e-commerce. Therefore, although they are still facing price-related difficulties, coffee exports are expected to reach about US$3.5 billion this year.

Held by the Vietnam Coffee - Cocoa Association (VICOFA) in coordination with ministries and agencies, the second

Vietnamese Coffee Day took place in the Central Highland province of Dak Nong’s Gia Nghia Town from December 9-

11 to promote the coffee sector.