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- Chapter 1: Overview of coffee and export activities in Vietnam. - Chapter 2: Current situation and the process of Vietnam's coffee export to other countries: Analysis and evaluation. - Chapter 3: Solutions to boost Vietnam's coffee exports to foreign countries.
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Until now, Vietnam is one of the famous countries for farming and agriculture - forestry, some popular products are rice, tea, rubber, ... and coffee. When it comes to coffee, Vietnam is internationally rated as the second country in terms of exports, this shows that coffee is an industry that has, is and will have a lot of potential and opportunities to develop. Except for those who are drunk with coffee, we can say coffee is an indispensable drink of the day. Each person has a different habit and taste of coffee, some people like the bitter taste but others love the sweet taste, some people use coffee when they work tired but also people use it during appointments with a partner or friend. And just like that, coffee accidentally holds a fixed position in the hearts of Vietnamese people, even foreign tourists. Joe Vinson has researched that coffee is an indirect product so that people can partially reduce the risk of cancer because coffee contains antioxidants. Besides, coffee also has many other benefits such as keeping the body awake, burning excess body fat, and strengthening muscles. With such positive impacts along with reasonable prices, abundant human resources and natural conditions in Vietnam, coffee is increasingly known by many foreign businesses and we also willing to cooperate with them. In general, coffee is one of the popular and highly attractive beverages in Vietnam in particular and other countries in the world, it is demonstrated through competition for different purposes from businesses. FDI enterprises to compete for a market share of coffee companies in the world as well as coffee chains on foreign markets are increasing. What makes coffee so attractive? Are you curious about its birth as well as other useful information in export activities from Vietnam to foreign countries? If yes, hopefully, this report will bring you lots of useful information.
Chapter 1: Overview of the coffee and export activities in Vietnam
Where is coffee come from? The first coffee beans were brought into Vietnam by the French, the first coffee variety was introduced in our country in 1857 through several French missionary priests. The first is experimentally planted in Catholic churches in some northern provinces and then the coffee tree is planted and then expanded to Thanh Hoa, Nghe An, Ha Tinh ... and then spread to the central provinces. such as Quang Tri, Quang Binh. In the period after the war, the coffee tea gardens here continue to be maintained. Therefore, this area has a very high distribution of coffee and tea trees. Finally, new coffee trees gradually developed into the South Central Highlands and Southeast and people began to realize that the Central Highlands was the most suitable place to grow coffee trees. From there, gradually popularized in Egypt and Yemen, and many countries around the world. Until now, when it comes to the euphoric drink, coffee is a must-have product. Coffee trees are thriving and the area to grow them is growing. The Central Highlands has become the region with the largest Robusta coffee growing area in our country both in size and reputation, nowhere in Vietnam has a famous domestic and international coffee, and at the same time with a famous region bearing many legends like Buon Ma Thuot coffee. After the liberation period of the country's coffee area was about 20 thousand hectares, thanks to the international capital support, coffee trees were gradually focused, until 1980, the cultivated area continued to increase and export with thousands of tons. The original plan was built in 1980 and set a target for Vietnam's coffee industry to have about 180 thousand hectares with an output of 200 thousand tons. After that, this plan was revised many times and the highest number stopped at 350 thousand hectares with an output of 450 thousand tons (VICOFA, 2002). Currently, Vietnam's coffee plays an important role in the strategy of boosting Vietnam's agricultural exports and the main export market is the EU market.
According to information sources, at present Vietnam has become the second country in the world producing and exporting the coffee industry. In general, Vietnam's coffee market accounts for nearly 5.6 billion USD, but in 2020, the COVID-19 epidemic has impacted the market price of coffee to decrease to 4.8 billion USD, this makes the production - export situation more difficult. However, it is expected that this price will increase again in the coming years with the expected figure to reach more than 8 billion USD about five years later.
Regarding production: According to the Import and Export Department, in 2020, due to the impact of many problems from nature, epidemics will lead to many problems in coffee production. Specifically, in the Central Highlands region, coffee production tends to decrease due to severe water shortages, in addition to the impact of drought, thousands of cultivated areas are wilted and burned. Hence, the Vietnam Coffee - Cocoa Association believes that this year's production is expected to decrease by 15%. Regarding exports: in 2019 - 2020, Vietnamese coffee is generally less competitive than other countries and thus leads to a large reserve due to low exports. Depending on the extent of the damage, the farmers have to increase measures to help the coffee tree grow as well as restore the growing area, also, many people switch to intercropping other crops. due to low coffee export prices this year. According to AsemconnectVietnam, within the first eight months of 2020, Vietnam has exported about over 1.15 million tons with a turnover of $ 1.97 billion. Regarding varieties: the most popular coffee in foreign markets is still Robusta coffee but in volume and value it has decreased significantly compared to the previous years, according to the latest calculation from the General Department of Vietnam Customs, in the first 8 months of 2020, Robusta coffee exports reached 983 thousand tons with a value of US $ 1.46 billion, generally down 2.4% in volume and 4.6% in value compared to the same period in 2019. Regarding coffee export prices: price data is still being updated daily but according to the most specific data that the General Department of Vietnam Customs said in the first 7 months of 2020, the country exported more than 1, 5 million tons of coffee and earned 1.79 billion USD with an average price of 1,699.9 USD / ton. Compared to the same period last year, exports decreased 1.1% in volume, 1.5% in turnover and 0.4% in price. This is also an unavoidable thing because in 2020 the world will be affected by many difficulties from natural conditions to serious epidemics.
As you know that Robusta coffee of Vietnam is the product that is exported and consumed the most in the foreign market, However, this is also uneven, for example, increases in countries such as Japan, Korea, Belgium, ... and decreases in countries such as the Thailand, America, ,... Regarding the consumer market, also due to the epidemic COVID - 19, most people turn to enjoy at home instead of buying from stores and supermarkets. In particular, Robusta coffee processed in the form of instant coffee is the most preferred product by foreign consumers, especially the Russians, this country has per capita consumption per capita after only two countries. British and American. However, recent information shows that the people of this country are tending to consume more powdered and bean roasted coffee.
because of organic products has the effect of losing weight as well as maintaining physique. If women often drink coffee for a specific health reason, young generation prefer coffees that are blended with other ingredients such as matcha, cream cheese, and new innovations like dalgona coffee or fruit coffee.
Export is a term for goods that are domestically produced and sold in foreign markets, a word commonly encountered in various economic sectors, especially international trade. We have learned about net exports in Macroeconomics, so we can understand that if net exports are positive - exports are greater than imports, there is a trade surplus in the country.
For the global economy: when it comes to the word "global", especially with import and export activities, it means that this is not simply a single issue between buyers and sellers in the same country as well, but it includes This includes the vast scale of global trade Exporting can be said to be the first activity in international trade with the main goal of consuming the products that people (businesses) produce and making an important contribution in the process of developing a country's economy in a strong and sustainable manner. For the economy of each country: one thing we can not be denied that exports are one of the main activities that drive economic growth and development, or in other words that export is one of the ways that a country is made. rich. Some of the roles of export activities we can mention are: expanding consumption markets; promote specialization, processing - production chain, economic restructuring; pioneering expensive leads to many other industries with development opportunities, and most importantly, building good relationships between foreign-investedå enterprises.
If we successfully export our goods, our brand will surely be known by friends from all over the world and will give our business many opportunities to grow. In addition to the expansion of products of businesses in consumer markets, export of goods will help them have more foreign currency, increase their creativity in work to innovate and improve products every day. Although this activity will be competitive, they will be able to learn a lot of expertise, how to create products with the most resources and cost savings and sometimes even scalable for cooperation on both sides is beneficial.
Comparative advantage is a concept mentioned by Ricardo in his work The Principle of Political Economy and Taxation, which shows the ability of a product to be produced at a lower cost than to produce the product. other. It can
be said that this is the basic foundation of international trade, David Ricardo has successfully inherited and developed Adam Smith's absolute theory. A rule has been drawn by him in the issue of import and export: countries should focus on specialization on the production - export of goods when they have a comparative advantage and import goods when the country There is no comparative advantage. By doing this, the total global production of products will always tend to increase.
year, the experts said that in 2016, Vietnam started to sign a few free trade agreements making the export of coffee, especially coffee products processing to foreign countries has become easier and more beneficial. Until 2017, coffee exports decreased slightly due to a decrease in domestic supply, the main reason was also affected by the climate but in 2018, both the volume and value of exports increased although many businesses had a crop transformation. According to the Institute of Agricultural Science for Southern Vietnam, the EU is the most consuming market for our country's coffee, accounting for 40% of the total volume, 38% of the total coffee export turnover of the country, and Southeast Asia areas is the second largest consumption market of our country with 13% of the total coffee export volume and turnover of our country. The situation of Vietnam's coffee exports in 2019 decreased sharply, mainly due to the export price and especially the focus on the export price of Robusta coffee - coffee accounts for about 74% of the total coffee export volume of the country. According to information from Vietnambiz, accumulated coffee exports in 2019 decreased 15.2% in volume, and 22.4% in value compared to the previous year. The coffee market report for 2020 is still being updated and there is no explicit datasheet. According to statistics in the first three months of 2020, the volume and value of coffee exports reached 474 thousand tons and 801 million USD, compared to the same period last year, this figure decreased by 3% in volume and 5.6% in value. In the Polish market, the cumulative export value of Vietnam coffee reached 12.31 million USD, up 77.3% while in the UK market it plummeted by 50.8% and reached 13.55 million USD. The data shows 4 overall factors for Vietnam's coffee exports: volume, value, average export price and 5 largest coffee consumption markets in Vietnam in the first 5 months of 2020. The special feature of this chart is that it shows us the data as well as the variatio : between the same time period in previous years. Figure 2.1.1 The Coffee Export Situation In Vietnam 5T (the first 5 months) of 2020 Source: ICO, General Department of Customs, Vietdata complied
If the first quarter had an uneven increase or decrease, in the second quarter, in general, the coffee export volume and value increased. Specifically, Robusta coffee volume increased 4.9% and value increased 1.9%, so this period coffee reached 694.6 thousand tons with a value of $ 1,029 billion. Regarding the type of export, Robusta is still the most popular type of foreign enterprises in Germany, Thailand, Australia and also less popular in the US, UK and France. It is also due to COVID-19 that global trade supply chains are affected, making it difficult to transport between importing and exporting goods between Vietnam and overseas.
Our country is an extremely diverse country in terms of types of coffee, not only that, each type of coffee is sometimes selected and divided by businesses based on the income level of each customer group. However, at present, in Vietnam, we only export 3 main types: Robusta, Arabica, and Excelsa, of which Robusta is the most popular type of coffee by many importers. Robusta is the second most important coffee grown in Vietnam, it can be said that it accounts for about 74% of the country's total coffee exports. Although accounting for the majority of that, in general, in the first 8 months of 2020, Robusta coffee exports still decrease. Specifically, according to the latest statistics from the General Department of Customs, Robusta coffee exports reached 983 thousand tons with a value of 1.46 billion USD, down 2.4% in volume and 4.6% in value compared to 2019. Table 2.1.2 also shows that Arabica and Excelsa only export in small quantities, this proves that maybe by 2020 all goods are at a disadvantage but have the opportunity such as Robusta coffee, there is still a lot of hope in the years to come. Table 2.1.2 Types of coffee exports in August and the first 8 months of 2020 Source: General Department of Customs
Vietnam coffee export prices always fluctuate. According to the original plan, it was estimated in 2020, the value of the quantity increased to 2.2%, and the value increased by 1.3% with a total of 941 thousand tons at the price of 1.59 billion USD. However, most recently, we have data on coffee export prices in the first 8
compete on production output, human resources, and invest to apply modern machines to the production - processing chain. Most recently, the Ministry of Industry and Trade has approved and published a list of 268 reputable exporters in 2019, including 11 coffee exporters (see table 2.1.3). These are all brands with extensive experience and cooperation with many countries, we can see the highest top list is Intimex Joint Stock Company and the last one is Minh Tien coffee Import-Export Company Limited. Of course, every business has different pros and cons, we can not but admit that the competition helps the economy develop strongly. Table 2.1.3 The reputable coffee exporters of Vietnam in 2019 No Company Name Selected Unit 1 Intimex Joint Stock Company Ho Chi Minh City Department of Industry and Trade 2 Mascopex Joint Stock Company Vietnam Coffee - Cocoa Association (VICOFA) 3 Daklak September 2nd Import-Export Company Limited Department of Industry and Trade of Dak Lak province 4 Tin Nghia Corporation Joint Stock Company Department of Industry and Trade of Dong Nai province 5 Phuc Sinh Joint Stock Company Vietnam Coffee - Cocoa Association (VICOFA) 6 Vinh Hiep Co. Ltd Vietnam Coffee - Cocoa Association (VICOFA) and Department of Industry and Trade of Gia Lai province 7 Intimex Dak Nong Joint Stock Company Department of Industry and Trade of Dak Nong province 8 Dakman Vietnam Co. Ltd Vietnam Coffee - Cocoa Association (VICOFA) 9 Agrexport Joint Stock Company Vietnam Coffee - Cocoa Association (VICOFA) 10 Hoa Trang Import-Export Company Limited Department of Industry and Trade of Gia Lai province 11 Minh Tien coffee Import-Export Company Limited Vietnam Coffee - Cocoa Association (VICOFA) Photo by: Sunflowers team Source: www.moit.gov.vn Besides the enterprises recognized as "the most prestigious export in 2019", we also have businesses that still have a position in the hearts of many foreign traders/businesses, we can mention a few companies as: Trung Nguyen Coffee Group: carries in itself the quality brand name with the top export quantity in Vietnam and is refined by the quintessential substances from the land of Buon Ma Thuot, with the sunny and windy highland terrain favorable for growing coffee. The coffee is covered with long-established and pristine coffee beans, bringing outstanding quality with bold Vietnamese flavor. Trung Nguyen has a unique flavor formula combining the uniqueness and the
oriental know-how that makes it impossible for customers to confuse it with another brand. In order to assert its position in the international arena, so far Trung Nguyen has exported its products to more than 80 countries, G7 instant coffee is the one that importers love the most, in addition, they are also selected "try before you trust" is a diplomatic ambassador to connect Vietnamese culture with the world. Vinacafe Bien Hoa Joint Stock Company: With the slogan "Vietnam Coffee, for Vietnamese", their businesses have researched and produced to develop and create their own brand. As a result, they have been successful in both instant and roasted coffee. It is a breakthrough in the Vietnamese coffee market to create their own character and many people also love this brand. Vinacafe is also considered to be the oldest growing enterprise in the history of Vietnam's coffee industry, so far they have had a favorable first step and have a strong foothold thanks to the delicious taste and satisfying demand of domestic and foreign consumers. An Thai Coffee Group: This is also one of the "competitors" of Vietnamese coffee exporters, with more than 20 years of experience in the field of production and development based on the slogan "Green Development - Strong growth “. An Thai Coffee received a series of certificates and awards for outstanding coffee quality, absolute assurance and received the trust of domestic and foreign customers. An Thai coffee products have been well received by other countries and present in many international markets and affirmed their position in the international areas.
Except for businesses with long-term experience, a thorough information search is essential for new businesses. In the import and export stage, there are many means of transport such as land, sea, air, ... However, goods going by sea are more common, so here are 8 steps to Export of goods by sea which we would like to discuss with you: Figure 2.2 The general export (designed by Sunflowers team) Source: www.container-transportation.com/quy-trinh-lam-hang-xuat
When businesses between countries want to expand their brands through economic and commercial relations to enjoy certain incentives or promote economic development, the fact that these countries negotiate with each other to have Being able to sign trade agreements is extremely necessary and is quite important for each participating country. So what is a trade agreement? This is a diplomatic document between two or more states to negotiate and sign the conditions for engaging in commercial activities. As we all know, in 2020, due to the COVID-19 epidemic outbreak in the world, this has been affecting quite a lot of import and export activities of our country. However, because participating in trade agreements, besides the challenges, we have received many good opportunities for the industry in general and the coffee industry in particular. So what are the trade agreements for this coffee industry? We will learn through the presentation below: a/ EVFTA - Free Trade Agreement Vietnam – EU This is a new generation of a free trade agreement between our country and 27 member countries in the European Union - EU. Up to now, this is one of the two FTAs with the widest scope and highest level of commitment. As for the coffee industry, we can see that joining this trade agreement helps our country's businesses to expand their consumer markets, have certain tax incentives, and potential to attract capital. Foreign investment is very high. Although the opportunity is so, besides that, we also face a few challenges that businesses need to increase competitiveness and value of coffee by improving in terms of technology and energy absorption. modern governance force.
According to the Lao Dong newspaper, on September 16, 2020, Vietnam officially had the first shipment with a weight of 296 tons exported from Vinh Hiep Co., Ltd. to the European market under the EVFTA agreement. This is definitely a good start for Vietnam's coffee industry. b/ CPTPP - Comprehensive and Progressive Agreement for Trans Pacific Partnership This is a free trade agreement between Vietnam and 10 other countries. When participating in the CPTPP, Vietnamese businesses will enjoy a very preferential tariff reduction commitment when exporting goods to member countries. According to the World Bank, our country's exports to the countries in the CPTPP are forecasted to account for 25% of the total by 2030, expected to increase from 50 billion to 80 billion USD. According to a presentation on the European - American market, with 11 member countries in this CPTPP agreement, we will have more opportunities to boost exports of some potential products while the global economy market is showing signs of decline. In recent years, the trade relationship between our country and other countries has been really good, and we have four countries are Canada, Chile, Peru and Mexico, all committed to cut the tax rate as soon as this free agreement comes into effect, especially in coffee exports, Peru and Chile have committed to a tax rate of 0% for Vietnam. c/ RCEP - Regional Comprehensive Economic Partnership Agreement With a huge market of 24.8 trillion USD and more than 2.3 billion people including 16 member countries, of which 10 countries of ASEAN and 6 countries have joined, because RCEP is expected much and is considered as the largest FTA in the world. When joining this agreement, countries will receive a tax reduction of about 9000 types of goods and 65% of goods, this is certainly a perfect chance for coffee businesses and others commodities. Currently, the RCEP agreement is still trying to sign by the end of 2020, people are still looking forward to this happening in the difficult circumstances of this COVID-19 pandemic.
As you all know, our country's coffee prices have recently decreased, so the government also has many measures to overcome these situations: even though the coffee price has decreased makes many people worry, the government still advises people to grow coffee, but they must plan the correct coffee growing area and not continue deforestation of the natural forest to grow coffee. In addition, the government also provides capital so that coffee growers can further improve the quality of replanting. The State Bank, the Ministry of Agriculture and Rural Development have jointly deployed coffee replanting with a planned capital up to 12,000 billion VND and only for 5 provinces of the Central Highlands. However, due to unsolved problems related to state policies and the fear of change among our farmers, this is still difficult, expected to take 5-7 years.
