Prospects of Vietnamese coffee industry
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What is the prospect of the Vietnamese coffee industry? Extensive international cooperation is an opportunity for developing industries, including the coffee industry. The effective UKVFTA agreement has promoted the export of Vietnamese coffee to the UK market. Let’s learn more about the opportunities for the Vietnamese coffee industry in this article.
Prospect of the Vietnamese coffee industry
The UKVFTA agreement creates favorable conditions for Vietnamese coffee products to expand the market in the UK. Consumer demand for coffee in the UK is increasing, which is a good sign for the Vietnamese coffee industry.
According to UKVFTA’s commitment, after 6 years since UKVFTA takes effect, the UK will eliminate import tax on 99.2% of tariff lines, equivalent to 99.7% of Vietnam’s export turnover.
The UK is a profitable market for Vietnamese coffee exports. According to data from the International Trade Center (ITC), in 2021, total coffee imports from the world market into the UK will reach 203.38 thousand tons, worth $945.56 million. The average import price of coffee into the UK reached $4,649/ton, up 7.5% compared to 2020.
The EU is still the largest coffee supplier to the UK market, while Asia (including Vietnam) only supplies about 90 million tons/year. However, coffee from Vietnam and a number of other suppliers has also been purchased, packaged, and exported by international roasters to the UK market with their labels, including many brands. EU roasters.
British consumers traditionally drink more instant coffee than European countries. However, the reality also shows that sales of ground coffee and specialty coffee are increasing. British consumers are interested in coffee that is certified for quality or certified in terms of environment, labor, etc.
In the context that the UKVFTA agreement takes effect, Vietnam needs to boost coffee exports to the UK market. According to the General Department of Customs, in April 2022, Vietnam exported a total of 2137 tons of coffee to the UK market, with an average monthly export price of 2137 USD/ton, worth 4.56 million USD. In the first 4 months of 2022, Vietnam’s coffee exports to the UK reached 50.3 million USD, up 145.84% in volume and 196.67% in value over the same period in 2021.
How can Vietnamese coffee satisfy British consumers?
Compared to the domestic market, when exported to the UK, coffee needs to meet the requirements, preferences and tastes of consumers there. Specifically:
About taste: While Vietnamese people are used to coffee with a bitter taste, the British do not like coffee with a strong taste.
The bar, diverse, fruity taste like specialty coffee will suit the British palate.
About packaging: British people have a habit of reading information on the packaging very carefully to determine if a product has allergenic ingredients, how it should be prepared, meets ESG (environmental, social & governance) or not. Distributors will welcome products that are both suitable for consumer tastes and have beautiful packaging.
Vietnamese coffee needs to improve its quality to meet expectations
Currently, green coffee from Vietnam is mostly Robusta with low quality, low price competition is no longer appropriate. To meet the needs and tastes of the British as well as to penetrate deeper into this market, businesses need to invest in producing high-quality Arabica from smaller-scale growing areas with better governance. , have more traceability and sustainable development. At the same time, actively build and develop customer relationships with large distribution corporations. In particular, take the initiative in preserving and transporting agricultural products by sea; make good use of preferential credit policies and credit assessment and verification services of British banks’ customers.
Vietnamese coffee export output is a good sign of growth
Specific numbers will be the clearest evidence for the development momentum of Vietnamese coffee exports to the world.
– The Import-Export Department (Ministry of Industry and Trade) has just reported on the market of agriculture, forestry and fishery. Citing statistics from the General Department of Customs, this agency said that Vietnam’s coffee exports in August 2022 reached 110,000 tons, worth US$257 million, down 6.2% in volume, but up 9.0%. in value over the same period.
– Generally, in the first 8 months of 2022, Vietnam’s coffee exports are estimated at 1.24 million tons, worth 2.82 billion USD, up 14.7% in volume and 39.6% in value compared to the previous year. the same period in 2021. It is expected that by the end of September, coffee export turnover will exceed 3.07 billion USD in the whole of last year.
– In August 2022, the average export price of Vietnam’s coffee was estimated at $2,336 per ton, up 1.6% compared to July 2022 and 16.1% higher than August 2021.
– In the first 8 months of 2022, the average export price of Vietnam’s coffee is estimated at 2,268 USD/ton, up 21.7% over the same period in 2021.
– In terms of types, the data until the end of July recorded that exports of most types of coffee increased, except for Excelsa coffee, which decreased sharply.
– According to a Bloomberg survey, global coffee stocks are forecast to halve by the end of September 2022 compared to the same period in 2021.
– Vietnam’s coffee production is also expected to decrease by 6% to 1.72 million tons during 2022/2023.
– The Vietnam Coffee and Cocoa Association said that if the export price of coffee remains high, it is expected that in 2022, the Vietnamese coffee industry can still set a record turnover of 4 billion USD.
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