Despite being the world’s largest Robusta coffee producer and exporter, Vietnam is still worrying about its coffee industry as several weak points in the sector remain unsolved to date.
According to Le Hung Quoc, head of the Cultivation Department under the Vietnamese Ministry of Agriculture and Rural Development, poor categories of coffee products should be the first cause for the concerns.
Vietnam produces mainly Robusta coffee strain products while more than 70 per cent of the world consumes Arabica, which is recognized for its distinct taste and aroma and often branded to fetch higher prices.
The country currently has around 450,000-500,000 hectares under coffee cultivation with the majority dedicated to lower-priced Robusta beans despite the fact that their selling prices are very expensive due to high labor and watering costs, he said.
Regarding coffee sales, he said that most of Vietnamese enterprises have yet to participate in the trading mode of future contracts, and they often have to export coffee via intermediaries, not directly to foreign buyers.
Too much attention to foreign markets, meanwhile, have forced the Vietnamese coffee processors to ignore the huge potentials of the domestic market where nearly 7.5 million people bear coffee-drinking habits.
Another weakness of the industry is the underdeveloped coffee processing industry, Hung emphasized, adding that the quality of Vietnamese coffee beans has been very low for a long time because growers pick ripe and green coffee fruits at the same time.
Inappropriate coffee drying and processing methods have already affected coffee quality, especially its taste and aroma. According to statistics released by a coffee trading company, high-quality coffee currently accounts for just 6 per cent of the country’s total coffee exports.
To overcome the shortcomings, Hung said that it was necessary to create a sustainable growth policy in Vietnam’s coffee industry.
He said areas devoted to Robusta coffee should be reduced to open up more land for Arabica strains and that the key policy should be to reduce production costs and the number of hectares devoted to coffee areas to keep the supply-demand ratio in balance.
“Vietnam should supply only a reasonable amount of green coffee to the global market to meet customers’ demand,” Hung added.
Vietnamese farmers, meanwhile, should decrease the use of chemical fertilizers and pesticides and plant more shade trees above coffee plants, which would help reduce the need for constant irrigation. Organic fertilizers and special pruning methods should also be adopted, he said.
Manufacturing value-added coffee products, like instant coffee, while promoting domestic consumption of coffee, would also add to the industry’s growth.
Vietnam reportedly exported 885,000 tons of coffee totaling US$725 million last year, down 9.2 per cent in volume, but up 13.1 per cent in value over 2004. Its major importers were the European Union, the United States, Japan and Singapore.
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