The Vietnamese coffee industry has witnessed remarkable progresses in recent years. Under the policy of the Ministry of Agriculture and Rural Development, the coffee area is scaled down but annual output still increases to 1 million tonnes. With such high productivity and output, Vietnam earned more than US$2 billion for the first time in the 2007- 2008 crop. This is a great achievement of the Vietnamese coffee industry in the integration process.
To have the above result, apart from the effort of the people, producers, traders and processers of coffee, trade promoters have played active role in expanding the markets, both domestically and internationally.
In other nations, the Vietnam Trade Promotion Agency (Vietrade) organised two trade promotion programmes in the United Kingdom and Italia.
In Vietnam, Dak Lak Province is the hub of the Vietnamese coffee industry. The province is proactively organising many events to boost export of this key commodity. The first resounding event was the first Buon Ma Thuot Coffee Festival in 2005, which attracted 300,000 domestic and international visitors to see, taste and learn more about Dak Lak and Vietnamese coffee. The second noteworthy event was the Coffee Culture Week in 2007 in Hanoi and Ho Chi Minh City, one of 10 biggest trade promotion activities of the year. This event also attracted hundreds of thousands of visitors. And, Dak Lak province will host the second Buon Ma Thuot Coffee Festival from December 10 to 14, 2008 in Buon Ma Thuot city. The festival is expected to be one of 10 largest trade promotion events of Vietnam in 2008.
Besides, modern codes of manufacturing principles like GAP (good agriculture practice), 4C (common code for the coffee community), UTZ Certified and other technical standards are being widely applied in Vietnam to produce high quality coffee.
Apart from these achievements, the Vietnamese coffee industry also has the following weaknesses that need to be weathered.
Firstly, the fast-expanding coffee growing area is unplanned. Many coffee trees are grown in unsuitable soil and lack water sources, thus leading to higher coffee production costs.
Secondly, coffee in Vietnam is mainly produced by small-scaled farming households. Nearly 82 per cent of households have less than 2 hectares of coffee. Therefore, it is very difficult to apply advanced quality codes and techniques to coffee production and processing for higher quality.
Thirdly, the Vietnamese coffee products are not diversified. The crop structure is irrational as more than 92 per cent is Arabica coffee and around 6 per cent is Robusta coffee. Exported coffee is mainly Robusta variety.
Fourthly, a majority of coffee area is in the highly productive period while 25 per cent - 30 per cent of the area is aging. As a result, the output tends to gradually decrease.
Fifthly, a majority of coffee trees are not protected by other trees. Up to 50 per cent of coffee farms are irrationally fertilized and watered.
Sixthly, because coffee fruits ripen at the same period of time, the labour scarcity usually happens. Coffee growers compete with pay to recruit seasonal workers and this usually leads to higher production costs.
Seventhly, the coffee quality is low and instable in many places. The quality management is still weak. Not all pricked coffee fruits are ripened. Producers and exporters of coffee do not apply quality-based pricing methods. To date, only 5 per cent of coffee is checked for quality certification.
Eighthly, the trading system is unprofessional. Local exporters usually need intermediaries and this result to lower profit ratio. Vietnamese coffee trademarks are not developed.
Ninthly, only 7 per cent of coffee is sold in the domestic market. Thus, if the world market has problems, the Vietnamese coffee industry will be immediately affected.
Finally, coffee producers lack associations and financial supporting funds to share difficulties when they face problems.
If these weaknesses are tackled, the Vietnamese coffee will penetrate the whole market more stably and actively.
Vietnamese
