According to statistics, Vietnam’s coffee export in October reached 35,000 tonnes (equivalent to US$80 million), which brings the export volume of ten months to over one million tonnes (equivalent to US$2.3 billion). However, income generated from coffee is quite unstable, largely dependent on the international market. More effective overall strategies are necessary for the Vietnamese coffee industry to develop sustainably to its full potential.
Heaps of challenges
The results show that economic benefits generated by the coffee industry during recent years are limited. Unplanned production and chaotic trading still continue. So far, sustainable development has still been a big challenge for the Vietnamese coffee industry. The cultivation area granted with sustainable production certificates, such as UTZ Certified or 4C, makes up a very modest figure of over 10 percent. Besides, the area of old and stunted, diseased and low-yield coffee trees is very large. Generally speaking, Vietnam’s exported coffee is mainly ranked R2, i.e of low value. In addition, small-scale, fragmented production and low, unequal quality contributes to current situation. The industry is facing heaps of challenges, including: inadequate information, poor and ineffective information quality, lack of capital for management and R&D activities and tightened credit, etc., let alone the fact that the marketing, promotion and protection of brands is not good enough. All of these challenges result in many Vietnamese coffee products having copyrights registered by other suppliers in foreign countries. Buon Ma Thuot coffee of Dak Lak province can be a typical example. This trademark has been registered for monopoly protection for ten years in China. Another famous Vietnamese coffee trademark, Dak Lak, has also been registered by a French company.
Another shortcoming lies in the fact that the connection among management levels, farmers and small-scale traders has not been market-oriented. After harvesting, farmers have coffee sold massively right from the beginning of the season. When the prices go up, they do not have reserves for sales. 2010 – 2011 season is one of many such seasons. On the other hand, when many farmer keep coffee unsold to wait for increasing prices, it also raises an alarm. It is this psychology that makes the coffee market unstable.
Strategy for sustainable coffee industry
How to achieve sustainable development of the coffee industry is an important issue. In its sustainable development goal until 2020, Vietnam Coffee and Cocoa Association put forward three major strategies. The most important issue is how to advertise, well manage coffee sources and regulate demand-supply of coffee exported to global markets in order to stabilize coffee prices.
According to the Association, first and foremost, it is necessary to focus on improving the quality and competitiveness of Vietnamese coffee. To this end, Vietnam needs to increase export value of coffee via processing, pushing domestic consumption and lessening dependence on foreign producers and traders. It is also crucial to avoid cases in which trademarks of Vietnamese coffee are registered by foreign enterprises. This not only causes difficulties for export, but also casts an extremely negative impact on the Vietnamese coffee brand.
Secondly, it is pivotal to expand consumption markets domestically and internationally. The coffee industry needs to make changes and improvement to marketing and market seeking activities. Vietnamese coffee is currently being exported to over 50 countries and territories but traditional markets are lacking.
Last but not least, it is necessary to connect the added value chain of Vietnamese coffee in the most sustainable method. In coming time, the industry needs to further develop its value chain, apply a multilateral approach and draw the participation of different stakeholders in order to utilize available strengths to tackle existing shortcomings.
Thu Ha
Vietnamese
