Vietnam to focus on quality to increase revenue from coffee

Vietnam to focus on quality to increase revenue from coffee

October 24 - 2023

Coffee Geography Magazine

Vietnam’s coffee exporters are now focusing on quality to increase revenue at a time when the demand for robusta coffee from the country increases dramatically over the years. According to the Ministry of Agriculture and Rural Development, Vietnam was expected to earn 4.2 billion USD from exporting 1.7 million tonnes of coffee this year, a new high after setting the record at more than 4 billion USD last year, providing a firm foundation for the export target of 6 billion USD by 2030. 

Vietnam's coffee industry faces uncertainty in maintaining exports at high levels in the long run because the exports remain heavily dependent on high prices due to supply shortages, not on the added value of coffee products. 

The coffee sector in the country shifts its focus to improving product quality and aligning with market taste trends, especially in the major coffee consumption markets, which accounted for around half of global coffee imports, including the EU and the US. Vietnam exported 600,000 tonnes of coffee to the EU and the US in the first eight months of this year, representing 50% of the country's total coffee export volume.

vietnam map

Statistics from the General Department of Customs showed that Vietnam’s coffee exports reached 1.266 million tonnes worth 3.16 billion USD from January to September, a drop of 7.3% in volume but an increase of 1.9% in value over the same period last year. The average export price was 2,499 USD per tonne during this period, 9.9% higher than the same period last year. The average price in September was 3,151 USD per tonne, 3.2% higher than August and 29.6% higher than one year ago. 

The US becomes increasingly reliant on Arabica coffee and has progressively reduced Robusta imports from 6.1 million 60-kg bags in the 2010-11 crop year to 3.6 million bags in 2020-21. Processed coffee's share increased from 3.1% in the 2018-19 crop year to an estimated 6.4% in 2023-24. And in the EU, the percentage of processed coffee surged from 2.3% in 2017 to 5.5% in 2021.

According to the Vietnam Coffee Cocoa Association, erratic rains and storms during the 2022 coffee harvest season in the Central Highlands caused the output to decrease by about 10-15%. This year, El Nino also led to dryness in Vietnam’s major growing areas. The association noted that the upcoming crop output might be 10-15% lower, at around 1.47 million tonnes. 

A Bloomberg survey estimated that coffee output might be 7% lower than the previous harvest season. While coffee prices remained high, Vietnam was currently short of coffee for export. The Import-Export Department under the Ministry of Industry and Trade (MoIT) mentioned that the nation’s exports in the third quarter were slowing down due to limited supply.