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An answer to Vietnamese coffee export ranking in the context of Covid-19

Coffee is the third most consumed beverage globally, after water and tea. According to statistics of the ICO, Vietnam is one of the top 2 coffee exporting countries in the world. Vietnamese coffee export ranking gradually asserts its position on the world coffee map.

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A question of Vietnamese coffee export ranking

Many people know that Vietnam is one of the leading coffee exporting countries in the world, but “where is Vietnamese coffee export ranking”, “why can Vietnam do this” are questions that they want to understand before entering this industry.

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A question of Vietnamese coffee export ranking

An answer to Vietnamese coffee export ranking

Coffee is one of ten key products of Vietnam’s economy. Vietnamese coffee export ranking is mentioned in 2 aspects of export volume and export value.

Vietnamese coffee export ranked second in the world in terms of volume

Vietnam is currently the second-largest coffee exporter in the world after Brazil. For Robusta coffee, Vietnam is the world’s largest exporter with a total annual export volume of about 11.6-11.8 million tons, turnover is about 2.6-2.8 billion USD.

Under the impact of the Covid-19 pandemic, Vietnam’s coffee production was significantly affected. In the first 11 months of 2020, Vietnam’s exports of Robusta coffee decreased by 2.9% in volume. Exports to main markets like Germany, USA, Belgium, Thailand decreased but increased in other markets such as Italy, Japan, Algeria, the Philippines.

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Vietnamese coffee export ranked second in the world in terms of volume

Vietnamese coffee export ranked fifth in the world in terms of value

In the global coffee market, Vietnam is in a high position in terms of export volume but the export value is not high. In terms of export value, Vietnam gained $2.3 billion ranks fifth after Brazil ($5 billion), Switzerland ($2.9 billion), Germany ($2.6 billion), and Colombia ($2.5 billion).

The Vietnamese coffee export ranking in terms of value reflects that Vietnamese coffee is subject to many fluctuations of the world coffee market; the structure of coffee products with high added value is still low; Export of green coffee accounts for the majority, only 12% for deep processing. Vietnam needs policies to increase the value of coffee exports.

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Vietnamese coffee export

Reasons behind the high Vietnamese coffee export ranking

Over 30 years of establishment and development, it is undeniable that Vietnam’s coffee industry has achieved certain achievements. With the goal and mission of an entire country, Vietnam implemented a policy of coffee production, marking the turning point of a new era: 

  • Maintaining its position as a major coffee producer and exporter
  • Doubling the added value in coffee production by increasing productivity, quality, and added value.

Take full advantage of opportunities from Free Trade Agreements (FTAs)

To get the current position of Vietnamese coffee export ranking, Vietnam has firmly grasped the advantages and opportunities from trade agreements.

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Free Trade Agreement between Vietnam and the European Union (EVFTA)

On August 1, 2020, the Free Trade Agreement between Vietnam and the European Union (EVFTA) took effect, in which non-taxable coffee products will help Vietnamese coffee have a competitive advantage compared to other countries in this region and this is an opportunity for Vietnamese businesses.

Under the EVFTA, 39 Vietnamese products have been recognized and protected by the EU for geographical indications, including Buon Ma Thuot coffee. In addition to developing the traditional coffee market, businesses can consider developing specialty coffee brands, in order to increase the export of coffee products.

With the CPTPP trade agreements – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership; RCEP – Regional Comprehensive Economic Partnership Agreement) creates favorable conditions for Vietnam to export coffee, identify Vietnamese coffee brands and be competitive with coffee from other countries.

Vietnamese government’s interest in improving Vietnamese coffee export ranking

The Ministry of Finance of Vietnam supports businesses and people to grow coffee tax-free and use land (reduced from 20% – 50%). 

To promote coffee exports to this region, the Ministry of Industry and Trade recommends that businesses focus on cultivation and production development associated with a sustainable environment to attract consumers. Typically, the Ministry of Agriculture and Rural Development has approved the development plan of Vietnam’s coffee industry to 2020 with a vision to 2030.

Or the State Bank has reserved a credit package of VND 12,000 billion to support the 5 provinces of the Central Highlands to serve the coffee replanting program.

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Vietnamese government’s interest in improving Vietnamese coffee export ranking

Vietnamese coffee export ranking is stabilized by external objective factors

The complicated Covid-19 epidemic has made global and Vietnamese coffee production decrease significantly while coffee prices may continue to increase in 2021. With a large production source, this is also a great opportunity for Vietnam in exporting during the Covid-19 pandemic.

Although Vietnam’s major coffee import markets have all been affected by Covid-19 and implemented social distancing, demand for coffee at home is still high, creating favorable conditions for Vietnam to export coffee in large quantities, especially instant coffee.

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Vietnamese coffee export ranking is stabilized by external objective factors

Future for Vietnamese coffee export ranking

In the face of fierce competition from coffee exporting countries in the world, Vietnam not only increases output but also, most importantly, increases the quality of exported coffee. The problem is, Vietnam should have new, more drastic policies, and approach new markets with more diversified export coffee products.

Besides normal export, Vietnamese coffee export ranking can be strengthened if it can attack other potential markets such as:

  • Northern Europe: the premium coffee segment thrives in this region, as well as relatively high incomes, strong coffee demand, and thriving coffee culture. Vietnam can completely meet this market.
  • India: Mr. Atul Kumar Saxena, Chairman of the Indian Importers Chambers of Commerce and Industry (IICCI) with more than 30 years of experience in investing and doing business in Vietnam, thinks that in the coming time, there will be more Actively opening more business of Vietnamese agricultural products, members of the IICCI Chamber of Commerce and Industry have forced the import of instant coffee products and other products.

In order for Vietnamese coffee to be able to improve its quality and volume to reach deeper into new markets, there should be positive changes in the branding of Vietnamese coffee. The identification of Vietnamese coffee brands will determine the value of coffee exports, raise the country’s position and build great trust.

On the other hand, Vietnam needs to focus on zoning coffee production. Improve the Robusta plant variety while promoting and expanding the Arabica coffee-growing area. Businesses and farmers should focus on researching and forming specialty coffee growing areas.

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Future for Vietnamese coffee export ranking

If you want to import coffee from Vietnam, please contact me through Whatsapp: +84855 555 837 (Ms. Sarah)

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