Sustainable development holds the key to the success of Vietnamese coffee

With an estimated annual coffee export of over $3.9 billion, Việt Nam plays a vital role in uplifting the whole ASEAN coffee sector.

Vietnamese coffee industry has made steady headway in the international competitiveness rankings with a processing capacity of 2.36 million tonnes per year, according to Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến.

Tiến was speaking at the international conference on coffee on December 11.

The deputy minister said Việt Nam had 710,000ha of coffee with a yield of 2.7 tonnes per hectare in 2021, three times higher than the average global yield. Between 2021 and 2022, the country produced 1.7 million tonnes and exported US$3.9 billion worth of coffee, up 31.3 per cent year-by-year.

"With farmers of great industry and firms of great adaptability, Việt Nam has moved up to the top of the world's largest robusta coffee producers," said Tiến.

Amid the unfavourable global conditions, he urged the Vietnam Coffee Cocoa Association (Vicofa) to push ahead with sustainable development, focus on intensively-processing methods, and promote Vietnamese coffee culture to expand its global footprint.

Lê Văn Đức, deputy director of the Plant Cultivation Department, Ministry of Agriculture and Rural Development, said Việt Nam is among the countries with the highest coffee yield in the world. It also secures the 6th position in terms of coffee-growing areas.

The EU is its largest importer, consuming 42 per cent of its coffee export. Asian countries come second, and the US comes third with 10 per cent. By types of coffee, robusta makes up 75 per cent of the export whereas around 20 per cent go to processed coffee.

"We hope that processed coffee would take a bigger share of the pie in the short term," said Đức.

He called on the Vietnamese coffee industry to shift its focus to intensively-processing methods to improve its position in the international scene. He also suggested integrating digital technology into coffee production to enhance the links among players along the supply chain.

Đỗ Hà Nam, vice president of Vicofa, remarked that Vietnamese coffee exports normally reach a peak between December and March and fall off peak afterward. In the first six months of 2022, the figure topped 1 million tonnes, the highest in the past several years.

Out of 10 large coffee exporters in Việt Nam, six are Vietnamese companies and four are foreign-direct-investment-financed ones, indicating that the latter are well positioned to expand domestically.

"Foreign manufacturers are relocating their coffee-processing factories to Việt Nam for reasons of free trade agreements and low labour costs," said Nam.

Nam called for more favourable bank loans to coffee farmers to help them improve their yield. He also called for a complete ban on the use of glyphosate agents in coffee farming to prevent water contamination.

As urban migration is expected to cause labour shortages in coffee farms in the long term, mechanisation is the only option for coffee producers to pick up the slack and keep output stable.

Vanusia Nogueira, executive director of the International Coffee Organisation (ICO), remarked that global coffee prices go up and down in a cycle of two to three years over the past 20 years.

"When prices are high, producers become excited and cultivate more coffee plants. Consequently, they have huge production in about two to three years, leading to falling prices afterward," said Nogueira.

The executive director suggested three likely scenarios for global coffee consumption by 2030. One of the scenarios was that the consumption would grow by 2.5 per cent annually in the next eight years, reaching 48 million 60-kg-bags in 2030.

Victor Mah, president of the ASEAN Coffee Federation and ASEAN Coffee Institute, claimed that the two organisations are committed to giving full support to all their members in promoting domestic coffee consumption as well as trade activities for ASEAN coffee.

"With an estimated annual coffee export of over $3.9 billion, Việt Nam plays a vital role in uplifting the whole ASEAN coffee sector," said Mah.

The president also told Việt Nam News that Vietnamese coffee producers need to keep the sustainability of farmers top of their minds to be able to gain ground internationally.

"As we are entering a period of climate change, the sustainability of farmers is a big factor that will affect our coffee production in the years to come," he added.

Ablede Komlan, in charge of the Coffee and Coco Research Center in Togo, told Việt Nam News that Vietnamese coffee producers should work to unlock the full potential of the domestic market before proceeding to expand their market reach elsewhere.

"There are a lot of coffee shops in Việt Nam. That means the domestic consumption of coffee will create jobs," said Komlan.