Promising breakthroughs in coffee exports

09:08 | 04/01/2017 Trade

(VEN) - Strong increases in coffee prices in recent times have created impetus for coffee exports to soar.

Processed coffee products bring high export value

According to Do Ha Nam, Chairman of the Intimex Group which contributes 30 percent to the export volume of Vietnamese coffee, coffee prices have grown continuously since this April. Currently, farmers sell coffee to processing facilities at a price of VND46,000 per kg - the highest price in the past five years. The export value is forecasted to reach about US$3 billion by the end of 2016 against US$2.5 billion last year.

A Ministry of Agriculture and Rural Development report shows that Vietnam exported 121,000 tonnes of coffee worth US$246 million this October.

In the first 10 months, the export volume reached 1.5 million tonnes, up 40.2 percent compared with the same period last year, while the export value hit US$2.76 billion, up 25.4 percent. Germany and the US remained the two largest importers of Vietnamese coffee in the first nine months of 2016, respectively accounting for 15.2 percent and 13.2 percent of the total export value. Exports to most major markets grew, for example to the Philippines up 74.3 percent, Algeria 59.7 percent, China 56.3 percent, the US 45.3 percent, Germany 37.4 percent, Italy 17.9 percent, and Japan 15.4 percent.

Prospects from processed coffee

Vietnam Coffee and Cocoa Association President Luong Van Tu believed Vietnamese coffee exports could reach more than 1.7 million tonnes in volume and exceed US$3 billion in value this year. “Processed product exports, which could reach about US$350 million this year, have increasingly contributed to the total export value of Vietnamese coffee,” he said.

In the coming time, increased investment in coffee processing is expected to support the strong growth in processed coffee exports.

Nestle, for example, has invested nearly US$300 million in an instant coffee processing plant in Dong Nai Province and put this facility into operation. Domestic companies such as Trung Nguyen, Me Trang, and Vinacafe are expanding production. The Tin Nghia Group and some other domestic businesses are also promoting instant coffee processing for export.

In the opinion of experts, free trade agreements (FTAs) between Vietnam and the EU, the Eurasian Economic Union, and the Republic of Korea would create opportunities for Vietnam to boost processed coffee exports. In the past, Vietnamese processed coffee exports to these markets were subject to tax rates from 15-20 percent. FTAs have now reduced these tax rates to 0-5 percent.

Vietnam Coffee and Cocoa Association President Luong Van Tu:

Vietnam coffee exports are increasing thanks to intensified processing activities, looking towards the goal of US$5-6 billion by

2030.

Lan Quynh