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Fast and Effective Ways to start a Vietnamese coffee wholesale business

To establish a Vietnamese coffee wholesale business, it is necessary to understand all information and every small fluctuation of the Vietnamese coffee wholesale market. This article will provide the most detailed information about Vietnamese coffee wholesale.

See more: Vietnamese coffee export ranking in the context of Covid-19

Overview of Vietnamese coffee wholesale

Vietnam is one of the world’s leading coffee exporters because of its abundant supply. Therefore, there are many Vietnamese coffee wholesale suppliers around the world.

General situation of Vietnamese coffee wholesale industry

According to the statistics for the second quarter of 2021, Vietnam has the highest coffee yield in the world, averaging 2.6 tons per hectare for Robusta coffee and 1.4 tons per hectare for Arabica coffee. Vietnam is ranked third in terms of certified sustainable coffee area, second in terms of exports, and holds 8.3% of the global coffee export market.

Vietnam is a top Vietnamese coffee wholesale supplier in the world because of its high yield, large acreage, and low cost.

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Acreage and output of Vietnamese coffee

Vietnamese coffee production

  • Acreage of cultivated land

The area of cultivated land is decreasing, the main reason is that people have reduced the crops, intercropping with other crops. In addition, many coffee trees are old, and the replanting speed is slow, leading to a decrease in coffee production.

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Acreage of cultivated land

  • National production

In MY 2018/19, Vietnam’s coffee production decreased by 1.3% due to adverse weather conditions, accounting for 18.8% of worldwide production (worldwide production reached 10.05 million tons).

Although Vietnam’s coffee production in MY 2019/20 was forecasted at a record 1.93 million tons if having favorable weather, Vietnam’s coffee production in MY 2019/20 reached 1.8 million tons down 5% compared to the previous MY, but still accounted for 17.8% worldwide coffee production (worldwide production reached 10.11 million tons).

In MY 2020/21, Vietnam’s coffee output is forecasted to decrease by 15% due to the impact of floods in October 2020 and drought in May and June 2020.

Currently, Vietnam is suffering heavy consequences from the 4th wave of the COVID-19 epidemic, seriously affecting coffee production. The complicated and prolonged COVID-19 epidemic has caused a break in the coffee export chain in the Central Highlands. Many Vietnamese coffee wholesale suppliers are facing difficulties in the distribution, circulation, and export of goods while the cost of maintaining production and harvesting continues to increase onwards.  

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National production

Vietnamese coffee consumption

Coffee export is one of Vietnam’s strengths, accounting for the majority of coffee production. However, the Government and Vietnamese coffee wholesale suppliers are also constantly trying to increase the domestic consumption of Vietnamese coffee.

  • Vietnamese coffee export situation 
MY 2018/19 MY 2019/20 MY 2020/21 (estimated)
Export value  – Quantity: 1.17 million tons

– Value: 2,000 million USD

– Quantity: 1.16 million tons (down 1.3% over the same period in 2019)

– Value: 1,980 million USD (down 1.3% compared to the same period in 2019)

– Quantity: 1.07 million tons (down 6.9% over the same period in 2020)

– Value: 1,990 million USD (up 1.1% over the same period in 2020)

Export market – Germany and the US continue to be the two largest coffee-consuming markets of Vietnam with market shares of 13.7% and 9% respectively.

– Export value increased in markets: Philippines (22.1%), Malaysia (3.7%)

– Export value increased in the market: Japan increased by 18.4%; the Philippines up 10.3%; South Korea increased 11.9%.

– Export value decreased in markets: Italy, Spain, USA, Russia, Belgium, UK, Malaysia, Thailand, France, India.

– Export value increased in markets: Russia, China, Egypt, Indonesia.

– Export value decreased in markets: Germany, Italy, Japan, USA, Spain, Belgium.

The decrease in coffee output is the main reason why Vietnam’s coffee exports have fallen in the last 3 MYs. In addition, the policy of promoting domestic consumption during the complicated developments of the Covid-19 pandemic also affected the Vietnamese coffee wholesale to the international market.

  • Vietnamese domestic consumption

Up to now, Vietnam’s domestic consumption has increased sharply. In recent years, with the stimulation of Vietnam’s coffee demand, domestic consumption increased from 7% to about 13% of the country’s coffee output, reaching about 0.02 million tons/month. Especially for instant coffee products, due to convenience, they are gradually becoming popular, occupying many domestic consumers. This is considered a good opportunity for Vietnamese coffee wholesale suppliers. 

Vietnamese coffee export prices

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Vietnamese coffee export prices

The Vietnamese coffee wholesale price in the last three MYs increased continuously, which is a good sign for the Vietnamese coffee industry.

Reasons for the increase in coffee prices from the international market:

  • With supply disruptions from Vietnam and Brazil and high logistics costs, world coffee prices are forecasted to continue to rise sharply in the near future.
  • Christmas and year-end holidays and restaurants and hotels reopen are two strong factors. They will help boost coffee demand and increase world coffee prices in the coming time.

Reasons for the increase in coffee prices from the domestic market:

  • The price of coffee especially depends on the crop and weather factors of the coffee producing countries. Vietnam’s coffee harvest in the coming November may be reduced by 10-15% due to heavy rain. Because the demand for main markets such as the US and EU is recovering thanks to the vaccination campaign and economic reopening, the decrease in coffee output is the basis for expecting coffee prices to increase in the future.
  • In Vietnam, in August, the situation of the COVID-19 epidemic causing disruptions in the coffee supply chain to European markets under the EVFTA Agreement also caused coffee prices to rise.

Top of regions supplying largest Vietnamese coffee wholesale

Vietnamese coffee is grown in many areas stretching across Vietnam. However, the coffee growing area with the highest output is located in the Central Highlands including Kon Tum, Gia Lai, Dak Lak, Dak Nong, Lam Dong.

Reasons make these regions become the largest Vietnamese coffee wholesale

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Reasons make these regions become the largest Vietnamese coffee wholesale

  • The tropical climate is an ideal environment for the development of tropical industrial crops like coffee.
  • The fertile basalt red soil in volcanically affected locations is favorable for the development of huge industrial crop areas.
  • In the Central Highlands, the Sesan and Srepok rivers are the two main tributaries on the left bank of the Mekong. The basins of these two rivers in Vietnam are located in 5 provinces: Kon Tum, Gia Lai, Dak Lak, Dak Nong and Lam Dong. Therefore, this area has abundant underground water sources to provide sufficient water for the coffee-growing area.

Coffee production in each region

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Coffee production in Dak Lak

  • Dak Lak: Dak Lak is the Vietnamese coffee wholesale province with the largest coffee area in the Central Highlands.

Raw coffee exports reached 0.195 million tons, with a turnover of more than 291 million USD, accounting for 11.9% of the total turnover of the whole country. Up to now, Dak Lak coffee products have been exported to 58 countries and territories around the world. In which, Japan continues to be the largest market for coffee in Dak Lak province.

Coffee year 2019 – 2020 Coffee year 2020 – 2021
Area of cultivated land (ha) 208,109  above 200,000
Area for product (ha) 190,678  187,940
Yield (tons/ha) 2.45 2.54 
Output (million tons) 0.48  0.47 
Price (VND/kg) 31,847  34,600 – 35,400
Export situation
  • Over 0.12 million tons of coffee, accounting for 11.9% of the whole country
  • Export turnover reached nearly 332 million USD.
  • In the first 6 months of the year, coffee exports were estimated at 0.825 million tons, worth 1,520 million USD. 
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Coffee production in Lam Dong

  • Lam Dong: Although it is the second largest Vietnamese coffee wholesale province in the country in terms of area, Lam Dong coffee has the highest average yield and output in the country. Currently, the value of the coffee industry accounts for 60% of the agricultural sector in Lam Dong. In addition, Lam Dong has an Arabica coffee in Cau Dat – Da Lat that is evaluated by international organizations as having the highest quality in the world.
Area of cultivated land (ha) 172,000
Output (million tons) 0.515
Arabica coffee land (ha) 17,500 (account for 10,2% of coffee land )
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Coffee production in Dak Nong

  • Dak Nong: The province has the third largest Vietnamese coffee wholesale area in the Central Highlands with more than 120,000 hectares; the average coffee yield is only about 0.012 million tons/ha, lower than neighboring provinces. In the first eight months of 2021, coffee output reached 98.1 million USD, down 0.1% over the same period in 2020.
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Coffee production in Gia Lai

  • Gia Lai: The locality has over 97,000 hectares of coffee, in which, the harvested area is more than 80,000 hectares with an output of 0.25 million tons.
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Coffee production in Kon Tum

  • Kon Tum: The Vietnamese coffee wholesale area of increased because the coffee price has been relatively stable in recent years, the economic efficiency is better than other perennial industrial crops, so people are interested in expanding investment.
2019 2020
Area of cultivated land (ha) 21,470

increase 4.16% (+857 ha)

25,345

increase 17.46% (+3.768 ha)

New planting area (ha) 1,411 1,057

The reason why Vietnam is one of the world’s leading coffee wholesalers

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Reasons why Vietnam is one of the world’s leading coffee wholesalers

  • Abundant supply: Vietnam is a country with an abundant and stable coffee supply. Sometimes there will be lower output due to the impact of climate change, epidemics, but in general, Vietnamese coffee yields year-round because of the number of coffee growing areas in Vietnam spread along the country.
  • The price is cheaper than the international market: the price of Vietnamese coffee is generally always cheaper than the average price of the world because of favorable conditions in terms of terrain, climate, and weather, so it does not cost much to enter those problems. Besides, the abundant Vietnamese coffee wholesale output is also a reason for low prices.
  • High quality products: Low cost does not mean poor quality. Typically, Arabica coffee beans in Cau Dat – Da Lat are ranked as one of the best Arabica beans in the world.

Famous Vietnamese coffee wholesale types

Types of Vietnamese coffee wholesale are very diverse depending on the purpose of the buyers and the supply of the sellers. However, there are two basic types.

Green coffee beans

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Green coffee

Green coffee beans are coffee beans that have just been peeled and dried without any processing intervention. In Vietnam, there are two main types of green coffee, wholesale Arabica coffee beans and Robusta, and a small amount of Excelsa coffee.

The majority of Vietnam’s coffee production is Robusta, which is why Vietnam is the world’s largest coffee exporter.

Processed coffee

Processed coffee is coffee that has been roasted or ground or processed into finished products such as instant coffee. The European market is one of the potential markets to import processed coffee from Vietnam, in which the UK has the largest demand for instant coffee.

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Roasted Arabica and Robusta coffee

During the COVID-19 pandemic, when the global economy was severely affected, the demand for Vietnamese coffee wholesale has not decreased but increased. The trend of domestic coffee consumption also increased sharply. For export, roasted, ground, and instant coffee is also being favored by many countries around the world, so the export turnover also increases, accounting for 12% of the total export volume of the whole country.

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The export value of processed coffee during 2020-2021

In general, the trend is increasing.

  • The export turnover of processed coffee in November 2020 increased by 0.3% compared to November 2019, reaching 46.14 million USD.
  • In the second quarter of 2021, exports of roasted and ground coffee increased by 20.1% and 9.7% respectively.
  • However, by July 2021, due to the impact of the 4th wave of Covid-19 in Vietnam, the processing and export of Vietnamese coffee faced many difficulties, many items had to be postponed or suspended. 

From August 1, 2020, the Vietnam – EU Free Trade Agreement (EVFTA) took effect, instant coffee exports to the EU enjoy an export tax of 0% compared to the previous 10-20% rate, which is a great advantage for Vietnamese coffee wholesale businesses. The new tax rate creates advantages for Vietnamese enterprises to export instant coffee to this large market.

Ways to find reliable Vietnamese coffee wholesale suppliers

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Ways to find reliable Vietnamese coffee wholesale suppliers

Finding a reputable Vietnamese coffee wholesale supplier is extremely important because this directly determines the long-term business.

  • Search wholesale coffee beans suppliers on the Internet

The Internet is one of the most valuable free resources in today’s developed industrial society. The advancement of Google’s algorithm aids searchers in locating credible suppliers on the first page of search results.

  • Search wholesale coffee beans suppliers on the E-commerce platforms

In the “fever” of the e-commerce industry, online shopping is easier than ever thanks to the support of multinational E-commerce platforms such as Amazon, Alibaba. Above, Vietnamese coffee wholesale suppliers always update complete information about products, ways to buy and the price.

  • Find trustworthy broker services

For a beginner, broker service is an excellent option. A professional broker service will assist in locating a reliable Vietnamese coffee wholesale supplier, but require to pay a part of the revenue.

  • Participate in agricultural fairs

Agricultural trade fairs are typically held by the government or big organizations and corporations in order to connect with other small and medium businesses. As a result, it is a potential opportunity to find reputable Vietnamese coffee wholesale suppliers.

Tips to finding reputable Vietnamese coffee wholesale suppliers

Here are some tips to find reputable Vietnamese coffee wholesale suppliers and avoid scam suppliers.

Signs for finding reputable Vietnamese coffee wholesale suppliers

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Signs for finding reputable Vietnamese coffee wholesale suppliers

  • Having a valid business license and a real address: A reputable wholesale coffee beans supplier must have a business license, the company’s red seal issued by the government. Furthermore, the address of the company must be clear, specific, and searchable on international maps. Phone numbers, email, and websites must be real information. Reputable companies often use email addresses with their own company’s domain name, paying to use email instead of using free email.
  • Having a clear profile of products: Product-related certificates according to Vietnamese and international standards should be made public and available to the purchaser upon request such as TCVN 4193:2005, Fair Trade certificate, UTZ, RFA.
  • Transparency in cooperation: The supplier needs to be transparent with the buyer’s documents such as the contract.
  • Considering legal issues: A reputable supplier must always be a legitimate business and always comply with the law.
  • Financial stability: Financial stability will determine whether a supplier will be a reliable partner and that supply will not be interrupted as a result of financial risk.

Signs for avoiding scam Vietnamese coffee wholesale suppliers

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Signs for avoiding scam Vietnamese coffee wholesale suppliers

  • Unclear contact information: a scam supplier always tries to hide their illegal business. Therefore, people may not access the website or call the wholesale coffee beans suppliers directly or search for information on Google.
  • Prices are too low: fluctuations in coffee prices are always publicly updated daily on official websites such as ico.org. In fact, wholesale coffee beans suppliers can decrease the price to compete. But if a wholesale coffee beans supplier offers a much lower price compared to the price on the exchange, they are most likely just trying to trick for some money or provide low price goods.
  • Refusing to negotiate face-to-face: Although knowing that during the Covid-19 pandemic, it is extremely difficult to meet face-to-face to negotiate, it is still possible to use online meeting platforms such as Google Meet or Zoom for online negotiation. Be aware if they limit their communication, they may be trying to hide something. 

Ways to work with Vietnamese coffee wholesale suppliers

For the process of buying Vietnamese coffee wholesale to go smoothly and effectively, going through the following processes is a perfect choice.

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Ways to work with wholesale coffee beans suppliers

  • Price negotiation

Researching and comparing between wholesalers on the coffee market via the internet, commercial sites to understand the price before negotiating.

Asking for a discount of 15% -20% to get the best price with wholesalers. If bought in bulk, the price may be lower than expected and there are more incentives.

  • Samples researching 

For first-time buyers, it is extremely important to ask suppliers to show samples to avoid receiving poor quality goods or taking a long time to exchange without receiving the required goods.

  • Contract

Contracts are an important document when working with wholesale coffee beans suppliers. Be careful to check all the terms of the contract before signing.

It should be ensured that the agreement is in the best interest of both parties and follows the common law.

  • Payment

Wholesale coffee beans suppliers will recommend the appropriate payment method based on the number of products. However, it is best to split the entire order value into 2 installments: before and after receiving the product, instead of a one-time payment to ensure that the final condition of the goods meets the specified standards.

Consider different payment methods in the country where wholesale coffee beans suppliers are located or seek the advice of professionals.

  • Receive goods and feedback

When the items have been shipped to the destination, check the product to ensure that it meets the negotiated requirements and quality.

If not, contact the wholesale coffee beans suppliers as quickly as possible to discuss the solution further.

Factors affecting Vietnamese coffee wholesale suppliers

Only a few small environmental or economic changes can have a big impact on Vietnam’s coffee output and prices.

Influence of natural and environmental conditions

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Influence of natural and environmental conditions

  • Vietnam’s coffee output in 2021 is forecasted to decrease by 15% due to the impact of floods in October 2020 and drought in May and June 2020, so coffee prices will tend to increase in the future.
  • The coffee area is estimated to decrease further to about 675,000 hectares. The reason is that people have reduced the area, intercropping with other crops. In addition, many coffee areas are old, and the replanting speed is slow, leading to a decrease in coffee production.
  • The end of March and the beginning of April is the time when coffee trees bloom, which is also the peak period against drought in the Central Highlands. This affects coffee production this year.
  • The system of irrigation works has not kept up with production needs, the forest area has been narrowed, causing drought and water shortage, affecting crop quality and output.

Influence of socio-economic situation

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Influence of socio-economic situation

  • The supply chain is broken due to the COVID-19 outbreak, the blockade of many places will make travel more difficult, and many garden owners are afraid of a shortage of workers.
  • The deep-water port in Ho Chi Minh City currently lacks both ships and containers to transport goods for export. At the same time, the tight control of many localities also makes circulation and transportation difficult and delayed. Drivers have to undergo medical isolation, have a test certificate, and have a green permit, which increases transportation costs and limits the number of drivers.

Top 3 Vietnamese coffee wholesale suppliers

Here are the top 3 leading coffee suppliers in Vietnam to buy Vietnamese coffee wholesale.

K-Agricultural Factory – The leading supplier of green coffee beans in Vietnam

With a 25-year history of delivering Vietnamese agricultural products to the world, K-Agriculture Factory is one of the leading companies distributing Vietnamese coffee wholesale to the international market. 

K – Agricultural is also supported by a partner, Vietnam’s Ministry of Industry and Trade – Vietnam Trade Promotion Agency – VIETRADE to promote Vietnamese coffee wholesale to international markets such as EU, US, Japan,…

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K-Agriculture Factory

The products are carefully selected and handcrafted to ensure the quality of each coffee bean before being preliminarily processed and released to domestic and international markets.

Contact information:

Email:  info@k-agriculture.com

Website: https://k-agriculture.com/

Whatsapp: +84855 555 837 (Ms.Sarah)

Up Coffee – The leading supplier of roasted coffee beans in Vietnam

Up Coffee is a company specializing in providing Vietnamese roasted coffee with competitive prices and excellent quality from the great coffee hills of the Central Highlands.

Trung Nguyen Legend – The leading supplier of instant coffee in Vietnam

Trung Nguyen Legend is a long-standing coffee corporation in Vietnam. The strength of this group is to provide instant coffee products with the famous G7 brand domestically and internationally. In addition, Trung Nguyen Legend also tries to promote the export of roasted coffee beans to foreign markets.

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