VIETNAM TRADE PROMOTION AGENCY

EXPORT PROMOTION CENTRE

======

REPORT ON COFFEE SECTOR IN VIETNAM

(Báo cáo ngành hàng Cà phê Việt Nam)

Đơn vị tư vấn: Trung tâm Đào tạo- Nghiên cứu Khoa học Tổ chức và Quản lý Địa chỉ: 126/68 Phan Kế Bính - Ba Đình- Hà Nội Điện thoại: 04-7624464; 04-7624911

Đơn vị thực hiện: Công ty Cổ phần Truyền thông Quốc tế IQ Địa chỉ: 88 Hàng Trống, Quận Hoàn Kiếm, Hà Nội Điện thoại: 04-8288406

- Hanoi, 2007 -

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TABLE OF CONTENTS I. Overview 3

2. Overview information of coffee industry 3 II. Production situation 4

2. Characteristics, classification, and product structure 5 3. Production scale and capacity 5 4. Raw materials for production 7 5. Production trend 7 6. Major producer 8 7. Domestic and foreign famous coffee brands 8

III. Domestic consumption 9

1. Market features 9 2. Consumption situation 9 5. Distribution channels 12

IV. Export situation 13

1. Yield and turnover of export 13 2. Export market 14 3. Major exporters 18 4. Export opportunity and strength 19

V. Import situation 21

VI. Orientation and policies for developing coffee export of Vietnam22

VII. Useful address 24

3

I. Overview

1. Introduction on the product group mentioned in the report

This report mentions mainly coffee species for export of Vietnam, coffee

Arabica, Robusta and Chari.

2. Overview information of coffee industry

Vietnam locates in the tropical belt of Northern Hemisphere, where the

climate is suitable for developing coffee trees, and brings Vietnamese

coffee a very special flavour. Especially in the south, near the equator, hot

and wet tropical climate is suitable for Robusta coffee tree, gathering in

Tay Nguyen area of which Dac Lac accounts for over 50% of national

output. The north with cold winter is suitable for coffee Arabica.

Coffee C.Canephora Robusta of Vietnam, which is famous on the world, is

a product originating from Robusta species having been selected for

decades. Since they are produced concentratedly in good soil with suitable

climate high intensive cultivation, especially most of them are planted at

altitude of 400 m and over, big amplitude of temperature between day and

night, so they not only have high productivity but also good taste fancied

by many countries on the world.

Vietnamese coffee has been developing fast. The whole nation had 13.000

ha of coffee with the output of over 6.000 tons in 1975, and now

approximatedly 500.000 ha with the output of over 700.000 tons.

Among Vietnamese agricultural product commodities, coffee plays a quite

important role, every year coffee brings export turn-over of over 500 million

US dollars, ranking the second after rice.

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II. Production situation

1. Production location

The area of coffee planting nationwide is 489.000 ha, mostly concentrates

in Tay Nguyen areas.

The biggest area for coffee raw materials of Vietnam is still Dac Lac

province. The whole province has about 311.000 ha basalt soil, which is

most suitable for coffee tree to develop, among them planting area is

170.000 ha. This area maily plants coffee Robusta. In the last crop, Dac

Lac harvested 432.025 tons, and the expectation of 2007 – 2008 is

400.000 tons reaching the new quality standard. Dac Nong ranks the

second, and Lam Dong third.

The matter is for Tay Nguyen provinces, and Dac Lac in particular, how to

improve coffee value by cutting Robusta planting area, increasing Arabica

one, attaching importance to intensive cultivation, investing processing

industry, diversifying ground coffee products.

Main coffee planting areas in Vietnam

Province Area (ha) Output (tons)

Lâm Đồng 117.918 200.000

Gia Lai 79.126 100.000

Đồng Nai 28.875 25.000

Kon Tum 12.984 15.000

Bình Phước 13.693 15.000

ĐăkLăk 237.262 360.000

(Source: Vietnam Coffee and Cocao Asociation)

Companies running in the field of producing and processing coffee also

concentrate mainly in those areas.

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2. Characteristics, classification, and product structure

Vietnamese coffee has main types: Arabica, Robusta, Chari. TCVN

4193:2001 defines ranking coffee according to method of couting faults in a

kernel coffee sample. More specific classification can be seen from the

table about allowed ratio of mixing other kinds of coffee, as following:

Coffee

type

Class Especial and

Class 1 Class 2 Class 3 and 4

Arabica No mixxing R and C

Được lẫn

R=<1%

Được lẫn

C=<0.5%

Được lẫn R :

=<5%

Được lẫn C

=<1%

Robusta Mixxing C:=< 0.5%

and A=<3%

Mixxing C=<1%

And A =<5%

Mixxing C=<5%

and A=<5%

(Note: A: Arabica, R: Robusta, C: Chari).

At present, coffee output of Vietnam has been mainly Robusta with main

processing method of dry processing, harvested coffee is dried by sun

power. In years of long lasting rain, in the crop they have to dry them in

ovens fired by coal or firewoodP There have been some companies who

process with the wet method. A little output of coffee Arabica has been

processed by state-owned companies using wet method. Many companies

use colour selecting machine Sortex in the phase of classifying, removing

black, brown beanP

3. Production scale and capacity

25 years ago, a quarter of century, the matter of developing coffee trees

was set up with loud starting steps, mostly in area of 2 provinces of Dak Lak

and Gia Lai Kontum in Tay Nguyen. An that time, the whole country only

had less than 20.000 ha of low growth and productivity, with output of only

about 4.000-5.000 tons. Till now, in the year of 2007, the whole country has

over 500.000 ha coffee of strong growth, high productivity, the total output

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reaches 800.000 tons. Those figures go far across all thoughts, strategic

goals of the industry. Area of coffee in Vietnam started to raise fast in the

final half of 1980s in 20th century. Until 1992, world price of coffee dropped

at the lowest level since coffee production countries in the world threw their

inventory coffee to the market because International Coffee Organization

still applied im-export quotas. After 1992, coffee price recovered and

gradually reached the top in 1994 and 1995. At this time, everyone from

farmers, worker families in TayNguyen to city people from Nha Trang to

HCM cities flocked into looking for soil, buying gardens for coffee, resulting

in fast increase in coffee output yearly.

Vietnam is a top-ranking nation producing and exporting coffee Robusta in

the world, in the 2006-2007 crop, the output reached about 17,4 million 60

kg packs of coffee. However, according the Vietnam Cocao and Coffee

Asociation, real output could be 21 million packs, increasing 56%

compared with 2005-2006 crop.

Development of area and output of Vietnam coffee in the past crops

Crops Area (ha) Output (tons)

1992 – 1993 140.000 140.400

1993 -1994 150.000 181.200

1994 – 1995 215.000 211.920

1995 –1996 295.000 236.280

1996 – 1997 350.000 342.300

1997 –1998 410.000 413.580

1998 –1999 460.000 404.206

1999 – 2000 520.000 700.000

2000 – 2001 500.000 900.000

2001 – 2002 480.000 700.000

2002 - 2003 450.000 680.000

2003 – 2004 948.000

2004 - 2005 831.000

2005 - 2006 702.000

(Source: Vietnam Cocao and Coffee Asociation)

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With the total planting area has reached over 500.000 ha, and output of

over 10million packs each year, at the present coffee ranks the second after

rice in the catalogue of Vietnam exporting agricultural products. In order to

reach such a high ouput, Vietnam coffee industry attract about 300.000

families, with more than 600.000 labours, especially in 3 months of

harvesting, these figures can be 700.000 or 800.000. Thus, the number of

labours in coffee industry has reached 1.83% of total labours nationwide in

common, and 2.93% of agriculture in particular.

4. Raw materials for production

Raw material coffee for production of Vietnam is harvested from material

production areas mentioned above in II.1. Apart from Tay Nguyen, recently,

Son La has planned to aim at coffee as the main goal for agriculture

development. Son La determines to develop the main tree of coffee till 2010

will reach area of 10.000 ha coffee with the total output of 6.000 tons,

assuring for the demand of developing processing industry. This is a

promising source of material for the demand of developing Arabica

processing industry.

5. Production trend

At the present, the amount of Vietnam exporting coffee to the world market

accounts a high rate, but the quality is not high enough, so the export turn-

over is still low.

Many main coffee production areas in Vietnam still aplly old production

methods. To maintain the 2nd position in the world of exporting coffee,

Vietnam coffee industry will concentrate in improving the quality of coffee

products. So, the first task is to care about the quality by improving breed,

creating a new variety with high productivity and good quality. Besidesm

Vietnam also apllies new technology in production.

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6. Major producer

After 1975, in starting production, Vietnam only had a few old processing

workshops. In the North, there were some in Dong Giao, Phu Quy, with the

equipment since 1960-1962 by Germany. In the South, there were some of

old land exploitation like Rossi, Delphante. Together with extending the

coffee planting area, Vietnam also began to build new processing

workshops, from separate equipment to production chains copying the

Hang-xa sample of Hai PHong 1/5 Mechanic Factory, A74 Factory in HCM

City. In recent years, mnay companies have built new processing factories

with equipment imported from Germany, Brazil.

Processing agents with new equipment, good quality have been built in

recent five and 7 years assure to process from 150.000 to 200.000 tons

export coffee. Besides, there are many uncompleted reprocessing agents

with many separate machines, processing of preliminary treatment bought

from civilians in order to assure export standard.

7. Domestic and foreign famous coffee brands

Vietnamese coffee are widely known by domestic and foreign consumers

thanks to best brands including Vinacafe, Trung Nguyen, Thu Ha, Bao Loc,

Buon Ma Thuot, etc. Thu Ha Coffee is the brand proceeded by former Dinh

Dien brand which existed before 1975.

Other best known brands are also finding ways to improve its coffee quality

by applying new advanced technologies. These brands owners have

marketed instant coffee made by Moka and Robusta or coffee products with

flower favors, etc.

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III. Domestic consumption

1. Market features

Although this is a big market with huge population, the demand on coffee

products is still limited. Vietnamese coffee products are made mostly to be

exported.

2. Consumption situation

The average amount of coffee that Vietnamese people consume each year

is 0.5 kg per one. Recent reports of World Bank show that with its potential,

Vietnam’s market may consume 70,000 tons per year. It means that this

market can consume 10% of the amount harvested each year which is

700,000 -800,000 tons. Meanwhile, according to the World Coffee

Association, Vietnam’s domestic consumption is now nearly 3.6% which is

the lowest in the group of coffee producers. This difference is bigger if

compared to the amount consumed by the members of the World Coffee

Association which is 25.16%.

Coffee beans of Vietnam are mostly produced for exportation. Like many

other industries such as aquatic or farm products, coffee producers are

more interested in producing for exportation than domestic consumption..

A new way of Vietnam’s coffee producers is investing in a production line

of ground and instant coffee to meet the demand of the domestic taste but

the result is still limited.

3. Consumption trend

Among the Vietnamese young people, the trend of drinking instant coffee

is more and more popular to meet the demand of the modern life. Instant

coffee becomes the main trend of consumption so it has different tastes

and meets different demands very well. However, the investment in

producing instant coffee requires a huge ammount of caapital and cost of

technique transferring, which troubles small and medium enterprises. As a

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result, they still focus on producing and exporting coffee beans or ground

coffee and skip the domestic market.

The too high rate of exported coffee at this time has put a pressure of

exporting market for Vietnamese coffee, especially when the exporting

market have problems, Vietnam’s coffee industry may easily go into an

overproduction and suffer from big disadvantage in prices. Therefore,

Vietnam intends to encourage domestic consumption. The amount

consumed in 2010 which is estimated to double the current amount and

accounts for 20% of the production may be able to limit the pressure.

4. Price

The coffee prices in 2007 has fluctuated extraordinarily. Average FOB

price in Vietnam in the first 3 months is 1417 USD per ton, much higher

than that of the last year which was 289 USD per ton. The amount of cofee

exported has a sharp and extraordinary rise in the first 3 months of the

year reaching 494,000 tons, 228,000 tons higher than the same period of

the last year. This is also the reason why the price declined in March.

In the first 6 months of 2007, the price of coffee in Vietnam rose very

quickly and followed closely to the world market. The average FOB price in

Hochiminh city declined by 53USD per ton in March and rose again in April,

and in June reached the average of 1802 USD per ton, rised by 177 USD

per ton compared to the previous month and 326 USD per ton compared

to April 2007.

The defference between the domestic and the world price decreased from

200 to 100 USD per ton. The price of rough coffee beans (cà phê nhân xô)

in Vietnam in June 2007 rised 10% than May which is 2,530 VND per kg,

reaching 28,171 VND per kg.

In August 2007, the pice in Vietnam delined sharply to 1,679 USD per ton,

132 USD and 7.3% lower than the average price of the previous month

( the reason is that the timed price of robusta coffee is declined due to the

fluctuation in the world financial market). But in September, the price

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continued to rise and the average price reached 1,739 USD per ton, rising

50USD per ton compared to the August.

At the end of November 2007, the export pice of robusta range II of

Vietnam continued to rise slightly , fluctuating in the range of 1,650 to

1,685 USD per ton, decreasing about 200 USD compared to the middle of

Nov, but still 23% higher than the same period of the last year. The price of

coffee beans also falls to 26,400 VND per kg, 200VND lower than in the

middle Nov but still 5000 VND higher than the same period of last year.

At the beginning of December 2007, the price of robusta range II of

Vietnam continues to slightly decrease, fluctuating from 1615 to 1625 USD

per ton, 2.12% lower than the end of Nov 2007. The domestic price of

coffee beans fluctuates from 26200 to 26400 VND per kg.

Therefore, the price of Vietnamese coffee is still 50-70 USD per ton lower

than other coffee producing countries (the reason is that the trading

doesnot comply with the international standard)

(Source: Daktra)

Vietnamese coffe export price in October 2007

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5. Distribution channels

To meet the domestic demand, Vietnamese producers can distribute

directly via big super markets or retail shops or open their own coffee

barsPExpanding marketing and domestic consumption channels by

serving the demand of drinking instant coffee is now one of the ways

chosen by some producers in Vietnam. Besides Trung Nguyen coffee bar

chain, a number of brands like Highland, Phuc Ban Me, Buon Me Thuot

coffeeP are opening their own coffee bars in big cities like Hochiminh city,

Can Tho, Quy Nhon,PThis is aimed to market and introduce their products

rather than to ger high revenues.

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IV. Export situation

1. Yield and turnover of export

In recent years, Vietnamese coffee industry has had rapid developments.

In 2000, the exporting amount of Vietnamese coffee reached 874,676 tons

with the turn over of 263,259 thousand USD. In the crop of 2006-2007,

Vietnam exporting amount is 1.28 million tons with the turnover of 1.899

billion USD, rising by 40.45% in number and 94.19% in value compared to

the same period of the last year.

Kinds of Vietnamese coffee exports in the crop 2005-2006

No Kind Production(tons) Turnover

(USD)

1 Beans 785,146,773 837,771,354

2 Instant 869,705 2,770,341

3 Others 8,890 92,996

Total 786,025,368 840,634,691

( Source : Department of Customs )

In September 2007, export coffee of Vietnam reached 38,13 thousand tons

valued USE 65,93 million, reducing 10% in term of quantity and 12,46% in

term of value compared with that in August 2007 (yield of export coffee in

August 2007 reached 41,943 thousand ton valued US$ 74,145) reducing

20,46% in term of quantity and increasing 6,95% in term of value

compared with that at the same time with that in 2006. In October, Vietnam

export coffee reached 972,65 thousand ton valued US$ 1,467, increasing

44,58% in term of quantity and 86,71% in term of value compared with

October 2006 (reached 539,042 thousand ton valued 0,21% ).

By October 2007, export turnover of coffee was at top of Vietnam export

agricultural products. Vietnam is at the second position in the world ranking

in term of export yield of coffee kernel to the world market.

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Estimated in 2007, the whole country exported 900.000 ton of coffee with

turnover reaching 1,5 million USD; of which coffee in Dak Lak covering

more than 50% of yield. Annual crop in 2006- 2007, yield of coffee in Dak

Lak harvested was 435.000 ton kernel coffee. For the first nine months of

2007, Dak Lak has exported with turnover of 479 million USD.

2. Export market

Within 2005-2006 period, Vietnam exported Kernel coffee into 71 countries

in the regions. Export market has been expanded not only in Europe and

America, but also Middle East, Africa, some countries in ASEAN

Association and Middle America. Top ten countries import Vietnam coffee

are German, USA, Spain, Italy, Belgium, Poland, France, Korea, Britain,

and Japan, which import 3/4 exported coffee amount of Vietnam.

In 2006, the biggest markets for Vietnam Coffee is German market,

accounting for 15% total annual export output, then USA, Spain with 11%

and lastly Japan, Korea, and Poland.

Thị trường xuất khẩu cà phê của Việt Nam 2006

15%

11%

11%

7%

5%5%4%

3%

39%

Đức

Tây Ban Nha

Mỹ

Italia

Ba Lan

Hàn Quốc

Nhật Bản

Anh

Các nước khác

(Source: Vietnam Customs)

Markets of Vietnamese coffe export price in 2006

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Some major import markets of Vietnam in some months in 2007 as follows:

• Germany market: Germany is the biggest import market of

Vietnam. In March, 2007 Germany import reached 25,968

tons with the value of USD 37,140,603 and in three month

earlier of 2007 Germany import reached 70,287 tons with the

value of USD 102,553,942. In September 2007 Germany

imported 4,731 tons with the value of USD 8,163,052 and in

the nine months earlier of 2007 Germany imported 138,568

tons from Vietnam with the value of USD 211,034,414.

• USA is the biggest agricultural products market in the world

and at the same time is major coffee import market in the

world. It is estimated that in 10 years demand for import of the

United States will increase 10% a year and the amount of

coffee imported will increase by each year. Specifically, for the

period 2005 – 2006 the United States imported 192 tons of

instant coffee from Vietnam, accounting for 22% of total export

amount of 829.7 tons and by March 2007 the United States

imported 15,660 tons from Vietnam with the value of USD

22,608,078. In the three months earlier of 2007 the United

States imported 56,016 tons from Vietnam with the value of

USD 80,778,659. By nine months earlier of 2007, the United

States imported 100,167 tons of coffee from Vietnam with the

value of USD 151,823,721, increasing 40% in compared with

three months earlier of 2007. According to assessment of

Vietnam commercial affairs in the United States, by 2010, the

amount of coffee of Vietnam exporting to USA will face

abnormal changes. In case of competitive price and good

quality, Vietnam can export to USA market with average

growth of 10 – 15% and the export turnover to this market can

reach the value of USD 350 million in 2010.

• Spain is also the major coffee export market of Vietnam. At

the present, demand for coffee consumption in this market is

relatively high. Therefore, import output of this market

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accounts for 11% of total volume of coffee export of Vietnam.

In march 2007 Spain imported 12,375 tons coffee from

Vietnam with the value of USD 18,257,866 and in three

months earlier of 2007 Spain imported 33,386 tons from

Vietnam with the value of USD 49,187,793.

• England is the biggest market for coffee import. The demand

for coffee consumption in this market is relatively high. The

amount of coffee imported to this market increases by each

year. At this time, England is the main export market for

Vietnam coffee and ranks 9th among the country importing

coffee from Vietnam. According to statistics, in march 2007,

England imported 21,729 tons of coffee from Vietnam with the

value of USD 30,742,361 and the total coffee import of

England in nine months earlier of 2007 reaches 27,992 tons

with the value of USD 40,654,142.

• Coffee import situation to Korea market is strongly promoted.

Demand for coffee consumption in this market is high. In the

recent years, amount of coffee imported to this market has

faced abnormal changes and declined dramatically. However,

import amount has improved considerably. In 2004, Korea

imported 35,000 tons of coffee from Vietnam with the value of

USD 35,883. By the nine months earlier in 2007, Korea has

imported 22,446 tons coffee from Vietnam with the value of

USD 11,453,615. At the present, Korea is ranking 8th among

the coffee importing markets from Vietnam and is one of

stable importing markets of Vietnam. The volume and coffee

import turnover from Vietnam of this country is increasing.

Coffee exporting market in march and three months earlier of 2007

Name of

country unit March,2007

Three

months

of 2007

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amount value

(USD) amount value (USD)

India ton 852 1.083.272 1.161 1.400.935

England ton 4.47 6.448.636 21.729 30.742.361

Swiss ton 206 344.976 262 434.832

Poland ton 2.369 3.438.455 8.942 12.849.838

Belgium ton 4.795 7.149.106 18.501 27.167.482

Portugal ton 953 1.490.983 1.986 3.096.142

UAE ton 991 1.373.694 1.336 1.908.537

Canada ton 909 1.353.871 1.865 2.745.036

Taiwan ton 106 163.045 262 427.894

Denmark ton 376 532.644 886 1.274.308

Germany ton 25.982 37.140.603 70.287 102.553.942

Estonia ton 384 525.971

Holland ton 5.027 7.355.389 13.753 20.215.900

Korea ton 3.823 5.430.993 8.13 11.453.615

Hong Kong ton 73 114.048 217 328.789

Hungary ton 216 222.371 709 959.554

Greek

ton 484 728.082 1.378 2.055.205

Indonesia ton 14.96 21.615.845 26.389 38.048.390

Italy ton 12.63 18.908.082 42.562 63.027.692

Malaysia ton 2.51 3.666.046 5.841 8.304.248

USA ton 15.66 22.608.078 56.016 80.778.659

South Africa ton 398 523.979 2.404 3.349.444

new Zealand ton 96 141.6 480 680.64

Russia ton 3.073 4.428.280 7.851 11.368.938

Japan ton 6.47 9.789.756 14.514 21.906.011

Australia ton 1.705 2.449.597 4.988 7.048.865

Finland ton 292 421.921

France ton 3.202 4.645.974 11.876 16.819.751

Philippine ton 1.861 2.537.533 3.346 4.710.534

Zech republic ton 84 113.337 336 474.876

Singapore ton 1.948 2.593.63 4.143 5.536.231

Slovenia ton 826 1.239.312 2.362 3.529.362

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Spain ton 12.375 18.257.866 33.836 49.187.793

Swedish ton 315 465.36 672 992.544

Swiss ton 12.678 17.105.248 55.194 76.678.568

china ton 1.344 1.989.313 3.542 4.990.411

(Source: Vinanet)

3. Major exporters

In the year 2005/06, there are 124 enterprises participating in coffee export

all over the country in which 52 enterprises are members of Vietnam

Association of coffee and cocoa, accounting for 41.9%. Member

enterprises have exported 595,673 tons with the turnover of USD

637,033,155, accounting for 75.95% market share. Besides, other three

connecting members which are Dakman, Neumann, Gruppe takes part in

coffee exporting market with export amount of 113,104 tons and the value

of USD 128,120,954, accounting for 14.27% market share. It is noticeable

here that these connecting members have exported with higher unit price

and achieved USD 1130 per ton in comparison with other members with

USD 1070 per ton, exceeding 5.6%. 68 enterprises which are not

members take part in exporting. These enterprises have exported 84,341

tons with the value of USD 88,816,190, accounting for 10.64% of market

share.

Vietnam enterprises popularly sell coffee with back subtraction, later

stopped price method. This is a kind of price speculation and they have to

face a lot of risk. At the same time, transaction price changes by day,

minute, second requiring the horse-trading of the transactor as the value of

each lot of goods is great which can make the enterprise suffer from losses

and even bankruptcy.

Now there is one company in Vietnam which is Trung Nguyen Coffee

Company is given certificate on good agriculture practice and coffee

quality. Trung Nguyen becomes the only Vietnam Company given the

Eurep certificate. At the mean time this company has operated a factory

processing instant coffee G7 in the Tan Dong Hiep A industrial zone (Binh

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Duong) with the capacity of 3,000 tons a year and the total investing

capital of USD 10 billion.

VINACAFE General Corporation is the state-owned company with 100%

state capital and is the biggest member of Vietnam Association of cocoa

and coffee. This enterprise has 70 companies and plantations. Annually,

VINACAFE exports a large number of coffee accounting for 20 – 25%

coffee output of the whole country.

4. Export opportunity and strength

Supply source of coffee is big and regularly distributed within the year.

Vietnam is now ranking second among the coffee producing countries. The

supply to the market is considerable. Vietnam can distribute about 600,000

– 700,000 tons of coffee each year.

Natural condition: Vietnam has many advantages; the soil and climate are

suitable for the growth of coffee. Thanks to natural condition, Dak Lak has

developed coffee with remarkable rate. Before 1975, Dak Lak had about

12000 hectares of coffee however this area has increased to 174000

hectares in the whole province in earlier 2007. at the present, area for

coffee growing is 489,000 hectares all over the country.

Abundant workforces: Agricultural workforce in Vietnam is crowding, and

Vietnam farmers are industrious and experienced in coffee cultivation and

accessible to advanced production and processing technology in the world.

International cooperation opportunities: Some coffee exporters such as

Indonesia and Malaysia have offered to cooperate with Vietnam to bring

benefit to coffee producers and export enterprises.

Coffee Cultural Week in 2007 is an activity following Coffee Festival held in

Buon Me Thuot in 2005 and an intermediate step to prepare for Coffee

Year with Coffee Festival hold in Buon Ma Thuot by 2008. The Coffee

Cultrual Week is organized with compact images representing information

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on Vietnam coffee sector. There will be more than 30 inland famous coffee

brand names and several outland enterprises at the fair. This will create

opportunity to promote Vietnam coffe enterprises to foreign countries and

to facilitate the cooperation between Vietnam and developed countries to

boost the stable development of coffee sector.

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V. Import situation

Vietnam produces approximately 100, 000 tons of coffee every year. There

are many domestic coffee supply sources, especially Rubusta coffee. This

explains why coffee is rarely exported into Vietnam. Arabica and

dissolvable coffee are mostly imported.

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VI. Orientation and policies for developing coffee export of Vietnam

Vietnam has adjusted its orientation and strategy in following contents:

• Moving structure of trees, identifying strategic target for the branch.

• Reducing production price and enhancing business effect.

• Manufacturing and providing many kinds of goods for market except

multiplication coffee in order to meet requirements of consumers.

• Manufacturing goods with high quality such as organic coffee,

special coffee etc.

• Innovating purchase relationship, expanding market for Vietnam

coffee trees, interest towards local market.

• Reducing coffee area, only retaining suitable areas based on

research inspection process and planning for coffee trees.

• Having plans and directions of changing structure of tree growth for

unsuitable coffee areas to suitable other trees, which brings

economic and environement effetiveness.

• Constructing mechanism of suitable coffee gender; apart from typical

coffee, it also needs to develop other coffees such as tea cioffee,

jackfruit coffee etc

• Strengthening construction of infrastructure, innovation of

technological equipments, establishing price policies in product

purchase with the principle of high quality, high price bargain, low

price bargain for low quality, evenly without purchase.

• Constructing organization system to guarantee for brand name to

appear in local and foreign market.

• Expanding kinds of coffees not only multiplication coffee but also

improvement of soluble coffee etc.

• Strengthening, synchronously dealing with plan of implementation,

particularly in organization in order to create firm coffee production.

• Expanding market for Vietnam coffee trees in foreign countries,

promoting coffee consumption at local market.

• Development of Arabica coffee trees at places which have enough

self-intensive farming conditions, area reaches about 1.000 ha;

output from 3.000 - 4.000 tons goods and private brand name.

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Constructing soluble coffee processing plant with capacity of 500

tons/year to provide for local market and export.

• Development of strong coffee production industry in Vietnam.

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VII. Useful address

Vietnam Coffee and Cocoa Association (VICOFA)

No135A Pasteur, Ward 6, district 3, Hochiminh city

Tel: (84-8) 8231513/ 8231520

Fax : (84-8) 8231511

Email: vicofahcm@vnn.vn

Website: http://www.vicofa.org.vn

Ministry of Agricultural and Rural Development (MARD)

http://www.mard.gov.vn