Vietnam ranks first in terms of coffee cultivation yield in the world and ranks second in export market share. But its export price is the lowest.

The General Statistics Office (GSO) reported that Vietnam exported 230,000 tons of coffee in March 2023, worth $522 million, an increase of 9.2 percent in quantity and 10.2 percent in value compared with the same period last year.

As of the end of the first quarter of 2023, Vietnam had exported 572,000 tons, earning $1.27 billion, down 1.6 percent in quantity and 2.3 percent in value.

In Q1 2023, Vietnam’s average coffee export price was $2.214 per ton, a decrease of 0.7 percent.

In 2022, Vietnam exported 1.78 million tons, worth $4.06 billion, up 13.8 percent in quantity and 32 percent in value over 2021. This was the first year that coffee export turnover exceeded $4 billion tons in Vietnam.

According to the International Coffee Organization (ICO), Vietnam is the second largest coffee exporter in the world (February 2021 – January 2022), after Brazil. In terms of productivity, Vietnam is No 1 with a yield of 2.4 tons per hectare. However, Vietnam’s coffee is priced cheaply.

The Import-Export Department under the Ministry of Industry and Trade (MOIT) cited statistics from the Statistical Office of the EU as reporting that in 2022, the EU imported 3.05 million tons of coffee, worth 12.81 billion euros ($13.85 billion) from non-EU markets.

With the export volume of 662,000 tons only, valued at 1.54 billion euros ($1.66 billion), Vietnam was the second largest non-EU coffee supplier for the EU market, after Brazil.

Of five non-EU coffee suppliers for the EU market, Vietnam’s coffee price was the lowest. The EU imported coffee from Brazil at 4,162 euros per ton, from Honduras at 5,036 euros, from Uganda 2,539 euros, and from India 2,728 euros per ton. Meanwhile, it imported coffee from Vietnam at just 2,323 euros per ton on average, which was far below Brazil, Honduras and India’s.

The US International Trade Commission reported that in the first 11 months of 2022, the US imported coffee from Brazil, Columbia, Vietnam, Guatemala and Mexico at $5,817 per ton.

While the US imported coffee from Vietnam at just $2,331 per ton, it paid $6,345 per ton for Colombia’s coffee, which was 2.7 times higher than Vietnam’s, $6,082 for coffee from Guatemala, $5,559 from Mexico and $4,315 from Brazil. It imported coffee from other markets at $7,727 per ton.

Coffee branding

Doan Huu Tue, CEO of My Viet International Group, said that Vietnam’s coffee export prices are much lower than other countries because Vietnam mostly exports raw coffee.

Processed coffee brings higher value. However, the proportion of processed coffee products in Vietnam’s exports is modest. 

Vietnam mostly exports Robusta coffee (75.5 percent of coffee export value in 2022), while Robusta coffee is cheaper than Arabica.

Vietnam still cannot build up a national coffee brand. For many years, Vietnam has not earned much money from coffee, though it is one of the biggest coffee sellers.

“As enterprises export coffee at low prices, they collect coffee from farmers at low prices. As such, it is farmers who are at a disadvantage in the value chain,” Tue said.

Tue, the director of a company who exports 80 percent of coffee as processed products, said that the coffee processing technology of Vietnamese enterprises is modern and it is in no way inferior to other countries. 

“Building a national brand is not only the story of enterprises alone, because they don’t have financial resources and capability to do it. They need support from appropriate agencies,” he said.

Columbia only exports 1 million tons of coffee and has a turnover of $3.2 billion, the third largest in the world. Meanwhile, Vietnam exports 1.78 million tons and earns $4.06 billion, which means Vietnam’s export value is 30 percent lower than Columbia. It gets higher revenue because of higher quality.

Blue Son La is one of the success stories about branding. Phan Minh Thong, CEO of Phuc Sinh Group, the owner of the brand, said the fresh coffee price once soared from VND6,500 per kilogram to VND15,000 and the output was 400,000. The province’s leaders revealed that this was the first time that farmers had deposited up to VND250 billion at banks during the pandemic. 

Thong said that Son La’s Arabica coffee price is much higher than many other domestic coffee products.

Minister of Agriculture and Rural Development Le Minh Hoan commented that Vietnam ranks second in the world in terms of coffee export, but it still doesn’t have any brand listed among top 10 most expensive coffee brands in the world.

In the world, people approach coffee not just as a kind of drink. There are many economic values from coffee plants, such as coffee flower honey, fertilizer from coffee grounds; while fabric dyes, yarns and shoes can also be made from coffee.

Viet Nam Net