Vicofa ensure that demand for Vietnamese coffee continues to grow

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Domestic coffee consumption increases with many Vietnamese brands and international supply chains from companies in the industry. The new Nespresso Saigon Centre Boutique opens in downtown HCM City. — Photo courtesy of Nespresso

HÀ NỘI — Domestic and international demand for Vietnamese coffee continues to grow, thanks in no small part to the Việt Nam Coffee and Cocoa Association (Vicofa), who are determined to ensure that this trend continues.

Đỗ Hà Nam, Vicofa’s vice president, told the 9th Annual General Meeting of the association: “There are 30,000 coffee shops in Việt Nam and the number is increasing.”

Vicofa said that in recent years, the amount of coffee consumed by the domestic market has increased to about 10 per cent of the country’s total coffee production.

According to the experts, the increase in domestic consumption is thanks to the presence of many Vietnamese brands on the domestic market and international supply chains from companies in the industry.

Last year, Vietnamese people spent about VNĐ53 trillion ($2.28 billion) on tea and coffee, a growth rate of about 10 per cent annually.

Thanks to the growing middle class in Việt Nam, Euromonitor Worldwide valued the local coffee and tea retail market at more than US$1 billion.

However, Nam said the rate is still small compared to Brazil and Indonesia, where the ratio of local coffee consumption is about 35 per cent.

As the per capita coffee consumption in Việt Nam is only a third of the global average, the association sees the market as very attractive for both domestic and foreign businesses.

As a result, Nam added the association will continue “promoting Việt Nam’s domestic coffee consumption” to ensure that local demand continues to grow.

With VICOFA’s activities and the development of domestic coffee shop chains, the aim is to increase coffee consumption in the domestic market to 3 kg per person per year by 2023.

The association said the continuous decrease in coffee prices from 2016 to the end of 2020 has greatly affected the business performance of coffee exporters and the income of farmers. Meanwhile, high logistic fees have been troubling when the prices of their products were high this year.

As world coffee prices have increased to their highest level in years, domestic prices reached their highest level at VNĐ43,000(US$1.8) per kg. In the crop of 2020/2021, Việt Nam’s coffee exports reached 1.5 million tonnes with a turnover of more than $2.8 billion.

In particular, the export of roasted and ground coffee accounted for 9.1 per cent of the market share. The EU is the largest coffee consuming market, accounting for 40 per cent of total volume and 38 per cent of total export turnover. Southeast Asia has a much smaller 13 per cent. In the Chinese market, Vietnamese coffee accounts for more than 30 per cent of total imports. Việt Nam’s export products to China include green, roasted and instant coffee.

Vicofa’s leader said that in the coming years, the country’s coffee industry will strive to maintain its position as the world’s second-largest exporter of green coffee and to increase export turnover to $5-6 billion by 2030, by enhancing the productivity, quality and added value.

In the 30 years since being established, Vicofa has made important contributions to increasing the global market share of Việt Nam’s coffee exports, which have risen from 1.6 per cent to 18 per cent.

The association has closely followed the fluctuations of the world market, as well as the economic and social factors affecting the coffee market, to promptly make recommendations on policies.

Vicofa has also proposed the Government, ministries and departments create favourable conditions for farmers and businesses to get loans with preferential interest rates to help the production of the industry.

Through coordination with the Ministry of Agriculture and Rural Development (MARD) and the Department of International Cooperation, Vicofa has negotiated amendments and supplements to the International Coffee Agreement (ICA) 2007, focusing on issues related to the role and rights Việt Nam’s interests at the ICO.

MARD’s Deputy Minister Lê Quốc Doanh said: “The achievements of local coffee industry are thanks to the joint contributions of coffee growers, entrepreneurs, coffee production and processing enterprises and leading role of Vicofa.”

Doanh suggested the association work closely with MARD and localities to implement effective solutions that help boost coffee production.

Vicofa also selected Nguyễn Nam Hải, general director of Coffee and Import-Export Inspection Joint Stock Company, as its president for its 10th term of 2021-2024.

The association said it would keep on boosting Vietnamese coffee brands, re-cultivating and testing new varieties of coffee for higher yields and quality and promoting trade for deep processed coffee into the foreign markets, taking advantage of EVFTA, EUKFTA and other Free Trade Agreements. — VNS

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