Search The sad year of coffee exports

Throughout the year, despite the increase in volume, the price of coffee exports continuously recorded a downward trend. Forecasting, entering 2019, Vietnam's coffee industry will continue to taste the "bitter taste" when the output is declining and prices are hard to move up.

Forecasted for the crops in years 2018-2019, the volume of coffee will decrease about 20%. Photo: N.Thanh

Quantity increases, prices fall

According to the latest report of the Ministry of Agriculture and Rural Development: Coffee export in 11 months of 2018 is estimated at 1.73 million tons and 3.3 billion USD, up by 23.4% in volume, but only increasing by 3.2% in value compared to the same period of 2017. Notably, the average export price of coffee in 10 months of 2018 was only 1,894 USD / ton, a sharp decrease of 16.7% compared to the same period in 2017.

Germany and the United States continue to be the two largest coffee consumption markets of Vietnam with market shares of 12.5% and 9.5% respectively. In the domestic market, in November, the domestic coffee market fluctuated with the world market trends. Compared to the previous month, buckwheat coffee in the Central Highlands provinces decreased by 700–900 VND / kg to 34,600 - 35,200 VND / kg.

Around the story of coffee production and export this year, Mr. Phan Xuan Thang - Vice Chairman of Vietnam Coffee - Cocoa Association (VICOFA) said: The crisis of coffee prices in the past year has caused damage to the industry of about 2,500 - 3,000 billion VND. The production cost for one kilogram of coffee is VND 35,000, while the selling price sometimes falls below VND 32,000 / kg. This makes people suffer losses.

Looking at the overall "picture" of production and coffee export in this year is easy to see; coffee prices fell deeply mainly because of the influence of the world coffee price slump. Specifically, according to the report of the International Coffee Organization (ICO); Global coffee production in the crop of 2017 – 2018 was estimated at 164.81 million bags, up 5.7% compared to the crop of 2016-2017. Meanwhile, coffee consumption was only 162.23 million bags, up 1.8%. For the whole year, the world has surplus of 2.58 million bags, putting pressure on coffee prices. At the peak of early September, coffee prices hit the 12-year low to 98.65 cents / pound.

Output goes down, prices are hard to rise

Mr. Thang predicted that in the crop year of 2018-2019, the production of coffee will decrease about 20% to 1.2 million tons.

Around the issue of coffee production and export in the next crop year, Mr. Luong Van Tu, Chairman of VICOFA further analyzed, there are three main factors affecting production. That is, the crop of 2017 - 2018 has higher production than the previous crop. For coffee physiology, last year obtained good result, but the crop will be difficult this year. In addition, over the past time coffee plantations lost money, so farmers switched to growing other crops, causing the coffee area to decrease. Besides, this year rains are heavy and prolonged causing stagnant water. This made many young fruits fall out of normal growth pattern, directly affecting the production of next year's coffee.

Ministry of Agriculture and Rural Development forecasts: Coffee prices in the coming time will be hard to prosper due to the output of new coffee this year from Brazil, and after meeting their domestic demand, it is expected to be about 4 - 5 million bags for export. In order to ensure the sustainable and stable development of the coffee industry, to avoid relying too much on price fluctuations from the world market, many experts point out: The key is still to further push coffee processing, exporting roasted coffee instead of exporting raw coffee as it is now. Besides, promoting branding effectively for Vietnamese coffee is also a key factor.

Mr. Do Kim Lang-Deputy Director of Trade Promotion Department (Ministry of Industry and Trade) analyzed more clearly: Vietnam currently mainly produces and exports green coffee beans, does not bring high added value. The world knows Vietnam exports coffee, but in fact they do not know how Vietnamese coffee is. Some brands such as Trung Nguyen and Nguyen Trang ... have brought export coffee to international markets, but most markets are not of global level, even Vietnamese coffee has not taken part in the global value chain yet.

In the current context, the Government needs to pay more attention to promoting brand-name export, increasing the added value of export products as well as competitiveness in the market. Trademark for the coffee industry or any other industry is the main target of Vietnam in exporting agricultural products. The Trade Promotion Department has been presiding over the branding for commodities, especially the food industry of which coffee is the first priority. However, this requires close coordination between MARD and the Ministry of Industry and Trade.