Vietnam’s coffee industry is currently experiencing a significant opportunity amidst the global surge in coffee prices. According to a recent study by the Food and Agriculture Organization of the United Nations, the prices of coffee worldwide have increased by approximately 40% in 2024. This rise can be attributed to adverse weather conditions resulting from climate change, leading to decreased coffee production in countries like Brazil, Colombia, and Indonesia.
Conversely, there has been a surge in demand for coffee in regions such as Europe, the United States, and Asia. In July, Vietnam’s coffee export turnover exceeded $560 million, contributing to a total export value of $3.6 billion in the first seven months of the year, marking a remarkable year-on-year growth of 20%. Vietnam, being the largest exporter of Robusta coffee globally, holds about 40% of the market share and is now seeking to capitalize on this opportunity to expand its market presence.
Nguyen Nam Hai, the president of the Vietnam Coffee and Cocoa Association (Vicofa), emphasized that the current international coffee market conditions are exceptionally favorable. With high prices and increasing demand, coupled with Vietnam’s stable coffee supply, the country is in a strong position to benefit. However, to fully leverage this opportunity, Vietnam needs to focus on enhancing its processing capabilities rather than solely relying on raw bean exports.
Despite the increase in export value, Vietnam’s coffee product structure still exhibits notable limitations. Deep-processed coffee, which includes roasted, instant, and specialty coffee, accounts for only 12 to 15% of total exports, as highlighted by Vicofa. This percentage falls short of the products’ actual potential compared to countries like Brazil and Colombia, where the ratio is higher, ranging from 30 to 40%.
Le Hoang Diep Thao, the founder and CEO of TNI King Coffee, emphasized that investing in deep processing can significantly enhance the value of coffee products. However, she noted that the initial investments required for technologies like instant coffee processing could be substantial, posing a challenge for some businesses due to financial constraints.
Technological hurdles and branding issues have also contributed to Vietnam’s coffee industry’s slow transition towards deep processing, according to industry experts. Dinh Van Thanh, an agricultural economics expert, stressed the importance of a long-term strategy focusing on deep processing investments and elevating the national coffee brand globally to avoid being solely an “ingredient factory” for larger corporations.
In conclusion, the current scenario presents Vietnam’s coffee industry with promising prospects amidst rising global coffee prices. By strategically investing in deep processing and enhancing branding efforts, Vietnam can further solidify its position in the international coffee market and capitalize on the ongoing market dynamics.
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