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Vietnamese coffee export maintains 2nd position in the world

Vietnamese coffee export has been around for more than 100 years and so far, coffee has become the main export agricultural product of Vietnam, ranking second only to rice.

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

Vietnamese coffee export price in the past 3 MYs update

The Vietnamese coffee export price is usually 5% cheaper than the coffee trading market. This is a huge competitive advantage when importing Vietnamese coffee.

However, coffee is a price-sensitive commodity and is often traded internationally in large quantities. Therefore, logistics costs and local currency exchange rates also have a great influence on coffee wholesale prices.

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Vietnamese coffee export price in the past 3 MYs update

The Vietnamese coffee wholesale price in the last 3 market years (MY) has increased due to domestic and foreign impacts.

  • The Covid-19 epidemic lasted for the past 2 years in Vietnam, farmers had to experience social distancing, so the growing of coffee trees was also affected.
  • At international seaports, workers also have to take off or limit work when having positive cases of Covid-19, which leads to congestion at seaports, not only international shipping costs but also yard costs increase.
  • After the vaccination campaign, the demand for coffee in European countries and the US increased again. In the context of the interrupted supply, the Vietnamese coffee export price also increased.
  • The decrease in coffee export output of the world’s leading coffee exporter, Brazil, caused a sharp increase in world coffee wholesale prices and Vietnam is no exception.
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The Covid-19 epidemic lasted for the past 2 years in Vietnam so the growing of coffee trees was also affected.

Vietnamese coffee export setting update

Coffee is a Vietnamese key agricultural export product (ranked second only to rice). Up to now, Vietnamese coffee has been exported to 80 countries and regions such as Germany, USA, Indonesia, Italy, Japan, Russian Federation, Spain, etc.

Overview of Vietnamese coffee export market

In recent years, Vietnamese coffee export has always been in the top 5 of the world both in terms of output with more than 1 million tons of exported coffee per year and in terms of value with about 2 billion USD per year. These figures prove that Vietnamese coffee export accounts for 18% of the world coffee market share and more than 10% of the global coffee value.

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Overview of Vietnamese coffee export market

Export situation of each type of Vietnamese coffee

Robusta is the main Vietnamese export coffee, accounting for 90% of export output. The price of Robusta coffee in the international market is usually about half cheaper than the price of Arabica coffee. Vietnamese Robusta coffee export accounts for 39% of world export output while Arabica coffee accounts for only a very small part.

The Vietnamese government is focusing on implementing long-term projects until 2030 to boost the Vietnamese coffee export supply chain in terms of both output and value, especially focusing on high-quality products such as Arabica specialty coffee in Quang Tri and Son La.

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Export situation of each type of Vietnamese coffee

The competitive advantage of Vietnamese coffee export

Vietnam has grown and exported coffee since the 20th century. Over 100 years, the coffee industry has gradually formed and developed strongly. Thanks to the favorable climate and support of the Vietnamese government, the Vietnamese coffee export has great competitive advantages, differentiating it from other coffee exporting countries.

Vietnamese coffee export has stable output

The biggest advantage of Vietnamese coffee export is stable output. Although affected by many domestic and international factors, Vietnam’s annual coffee output has not decreased much. An important factor that helped the Vietnamese coffee peak is the favorable weather conditions for farming. Fortunately, Vietnam is one of the few countries located on the world coffee belt. Vietnam also has a tropical monsoon climate, red basalt soil and the Mekong river system providing abundant water. All three factors above converge to become favorable conditions for coffee farming.

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Stable output

Competitive price

The Vietnamese coffee export price is usually cheaper than the price of coffee traded in the international market. This does not mean that Vietnamese coffee has low quality, Vietnamese exporters cut prices because they want to compete with others in the fierce coffee market.

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Competitive price

Tariff preferences

The EU-Vietnam Free Trade Agreement (EVFTA) reduces the import tax on green or roasted Vietnamese coffee from 7-9% to 0%. This is a factor that favors both Vietnamese coffee exporters and importers, making Vietnamese coffee prices more competitive in the international market.

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Tariff preferences

The process of Vietnamese coffee export

Before importing Vietnamese coffee, importers need to understand the process and requirements in Vietnamese coffee export to work effectively with exporters.

Marketing

Before exporting, Vietnamese coffee exporters often do marketing for international partners to know their image on digital platforms. The fact that exporters do marketing also partly shows their scale, product quality, and professionalism.

However, importers can also actively find Vietnamese exporters by searching Google, E-commerce platforms, or participating in international agricultural fairs.

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Marketing

Negotiate price and terms of the contract

This second stage is especially important because it determines whether the two parties will sign a contract, become long-term partners or not. This phase lasts from a few weeks, months to a few years because agricultural export orders often have high value, about tens to thousands of dollars. Therefore, the negotiation and contract signing cannot be done in a day or two.

In this second stage, the two parties will exchange information about the company, product specifications, prices, payment methods, packaging methods, Incoterms terms. If the Vietnamese coffee beans exporters and their customers can agree on those basic terms, then it will be time to discuss in-depth terms such as transportation, insurance, arbitration, disputes, and formal contract signing.

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Negotiate price and terms of the contract

Sign contract, deposit, and pack goods

Contract signing can take place directly or online. Due to the complicated situation of the Covid-19 epidemic, face-to-face meetings are also quite difficult, so the trend for electronic contracts or using a 3rd party expert is the best choice.

When signing a contract, the importers usually have to pay a deposit of 30-70% depending on the product’s characteristics. As for coffee, the importers will have to deposit 50% of the total contract value before the Vietnamese coffee exporters start making goods.

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Sign contract, deposit, and pack goods

Pack, load goods, and pay

In the fourth stage, the Vietnamese coffee exporters will have 1-3 weeks to prepare the goods, pack and deliver the goods according to their responsibilities in the contract.

When the goods arrive at the port, the importers need to pay the rest before the goods are on board. The exporters are then responsible for sending the bill of lading and commercial invoice to the importers.

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Pack, load goods, and pay

Track orders after-sales and repeat sales

After completing the orders, the importers need to check the goods carefully both quality and quantity, and give feedback to their exporters.

Vietnamese coffee exporters will take the initiative to take care of their customers, and both parties promise or sign a long-term contract.

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Track orders after-sales and repeat sales

Top 5 Vietnamese coffee export companies

Because of the development of Vietnamese coffee exports, many Vietnamese coffee companies were established. Here are the top 5 reputable Vietnamese coffee export companies.

See more: Talk about coffee exporting companies with K-Agriculture

Trung Nguyen Legend

Trung Nguyen Legend is one of the oldest Vietnamese coffee exporters. Trung Nguyen Legend’s products are now present in many countries around the world with a variety of products such as roasted coffee beans, instant coffee, etc. Trung Nguyen coffee is aimed at the retail market, therefore, Trung Nguyen coffee can be found in supermarkets, grocery stores, or coffee shop chains.

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Trung Nguyen Legend

Contact information:

Whatsapp: +84 855555837

K-Agriculture Factory

Established in 1996, K-Agriculture Factory was empowered by the Vietnamese government and became a pioneer in bringing Vietnamese green coffee beans to the international market. With the principle of “Quality is King”, this Vietnamese coffee exporter provides high-quality coffee beans, selected and processed according to modern international standards. K-Agriculture’s main market is also wholesale companies in Germany, USA, Japan, etc.

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K-Agriculture Company, LLC.

Contact information:

Email: info@k-agriculture.com

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

Whatsapp: +84 855555837

 Son Duong Coffee Co., Ltd

Son Duong Coffee is a Vietnamese coffee export company that supplies high quality coffee beans from high quality growing areas such as Buon Ho, LangBiang plateau, Tram Hanh – Da Lat.

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Son Duong Coffee Co., Ltd

Contact information:

Whatsapp: +84 855555837

WSCAFE

WSCAFE is inspired by “wholesale coffee”, so WSCAFE mainly focuses on the wholesale coffee market to increase the value of Vietnamese coffee export in the world coffee export chain.

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WSCAFE

Contact information:

Whatsapp: +84 855555837

Nguyen Coffee Supply

Nguyen Coffee Supply is the first Vietnamese specialty coffee company in the US. So far, Nguyen Coffee Supply has been exporting Vietnamese coffee for 4 generations.

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Nguyen Coffee Supply

Contact information:

Whatsapp: +84 855555837

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