Earnings from coffee, pepper are modest because of poor branding
Vietnam is one of the biggest coffee and pepper exporters in the world, but the money it earns is modest.
High export volume, low export value
Vietnam is leading in the world in Robusta coffee exports present in 80 markets, accounting for 14.2 percent of the global coffee bean market. However, its export turnover is far lower than Brazil’s, though Vietnam has great advantages in material growing area.
According to MARD, coffee export continued to decrease in both quantity and value this year. In the 2018-2019 coffee crop (by the end of September 2019), Vietnam exported 1,697,102 tons, a decrease of 5.42 percent compared with the previous crop. The export turnover was $2.96 billion, decreasing by 15.05 percent.
This I'm as attributed to the sharp coffee price fall in the world market caused by oversupply, the slowdown in global economic growth and trade tensions. Meanwhile, Vietnam lost its market share to rivals.
However, experts pointed out that the major reasons lie in the problems of the coffee industry. Vietnam mostly exports raw materials, not processed products, therefore, the added value is low. Its post-harvesting technology is not good, and the country still cannot build up a Vietnamese brand for coffee.
|Vietnam is leading in the world in Robusta coffee exports present in 80 markets, accounting for 14.2 percent of the global coffee bean market. However, its export turnover is far lower than Brazil’s, though Vietnam has great advantages in material growing area.|
Nguyen Huu Long, the founder of Shin Coffee, commented that in order to get higher added value for Vietnam’s coffee, the country needs to have high-quality products, and a good brand.
“Leading companies still don’t think of solutions that can heighten the value for Vietnam’s coffee,” he said.
The same situation can be seen in the pepper industry. Nguyen Tan Cong, chair of Nam Vang Cooperative, said the pepper export still cannot bring high value, mostly because of uneven quality and weak post-harvesting processing.
In the past, the pepper price once soared to VND200,000 per kilogram. As a result, farmers rushed to cultivate pepper everywhere, including tmareas with unsuitable conditions.
Later, the pepper price tumbled to VND40,000 per kilogram, and most pepper growers went bankrupt.
According to Nguyen Nam Hai, chair of the Vietnam Pepper Association, Vietnam’s Chu Se brand is relatively well known in the world and Chu Se products can go for a better price. However, the output is still not high enough to bring high value.
He said in order to make Vietnam a well known brand in the world market, it is necessary to follow a sustainable production process. Export companies need to cooperate with farmers and apply strict rules to control product quality.
Do Ha Nam, deputy chair of the Vietnam Coffee and Cocoa Association, said the industry needs the government’s support to advertise products and promote trade.
The third Vietnam Coffee Day event is set to transpire in Pleiku City in the Central Highland province of Gia Lai between December 8 -10, with the participation of hundreds of international organisations and businesses.
Vietnam’s coffee export price has dropped to a 10-year low and is continuing to slide. Analysts believe the price won’t go up in the last months of the year as supply is increasing.