The rate of Vietnamese coffee processing for export is still low

18/01/2022

According to the Vietnam Coffee and Cocoa Association (Vicofa), coffee export turnover in crop year 2020-2021 reached $2.8 billion, equivalent […]

According to the Vietnam Coffee and Cocoa Association (Vicofa), coffee export turnover in crop year 2020-2021 reached $2.8 billion, equivalent to crop year 2019-2020, although the volume decreased by about 10% to 1.5 percent. million tons.


Vicofa said that in the next 10 years (2030), the goal of coffee export turnover is 5 – 6 billion USD, which is more than 2 times higher than the current one, with the motto “Productivity, quality, added value” “.
It can be seen that the strategy of the coffee industry in the near future is to promote processed coffee products (roasted coffee, instant coffee, ..) rather than focus on the quantity of green coffee as at present by the article. Past studies show that if the area is increased further, the nightmare of oversupply, falling prices will return.
In the 2020-2021 crop year, Vietnam exported 121 thousand tons, with a turnover of 433 million USD of deep-processed coffee. Thus, although the volume only accounts for 8%, the export turnover of processed coffee accounts for 15% of the total turnover of this item.
The average price for a ton of processed coffee is nearly 3,600 USD/ton while the price of green coffee on the floor is about 2,400 USD. Not to mention, Vietnamese coffee has to suffer from “reduction”. At one point, Vietnamese green coffee was deducted from a record high of up to 500 USD/ton.
According to Mr. Do Ha Nam, Chairman of the Board of Directors, General Director of INTIMEX Group Joint Stock Company, and also Vice President of Vicofa, currently Vietnamese coffee is the cheapest in the world, instead of Brazil before due to the deduction restriction.
“Vietnam’s price has to be deducted up to 450-500 USD/ton. The history of Vietnam’s coffee industry has never had to deduct so much. Meanwhile, Brazil’s coffee price is the plus price,” Mr. Nam said. .
Therefore, he believes that solving the problem of 6 billion USD means raising the rate of processed coffee from less than 10% as at present to about 25% or even more.
“If we can do like Indonesia when we put 50% of coffee production into instant coffee production, the dependence on ‘regulators’ of the green coffee market will no longer be a nightmare.” Mr. Nam said.
However, in the current context, increasing the proportion of processed coffee is a big challenge for businesses due to the level of technology, complex factory operations and farmers’ awareness.
During the past 4 crop years (2017-2018 to 2020-2021), the amount of processed coffee exported has only increased by about 10%, ranging from 110 to 130 thousand tons.