Vietnamese coffee is popular in the European market.

According to the Department of European and American Markets (Ministry of Industry and Trade), in 2023, Vietnam's agricultural sector made impressive contributions to the country's export activities in general. In the European and American market, in 2023, the export of 7 main agricultural product groups of Vietnam (including tea, rice, pepper, cashew nuts, vegetables, rubber and coffee) to this market reached approximately 5.3 billion USD, a slight increase of 0.65% compared to 2022.

Regarding coffee, despite the challenges from the fact that Vietnam's coffee reserves are currently very low while supply is tight and inflation is still not well controlled and interest rates are high in both the EU and the United States, in the last months of 2023, Vietnam's coffee exports to the European and American markets still successfully reached the finish line with a value of 2.33 billion USD, a slight increase of 0.1% compared to 2022.

In the first 3 months of 2024, the value of coffee exports to the Europe - America region increased by 51.9%, reaching 1.04 billion USD. Illustrative photo

Continuing the growth momentum, in the first 3 months of 2024, the value of coffee exports to the Europe - America region increased by 51.9%, reaching 1.04 billion USD and Germany was the number one import market for Vietnamese coffee with a volume of 69,924 tons; Italy ranked second with 63,952 tons; followed by Spain with 43,287 tons...

In fact, coffee is one of Vietnam's main agricultural export products and is mainly exported to the European, American and Southeast Asian markets. In particular, the EU is currently the largest coffee consuming market in the world, and is also the largest coffee consuming market of Vietnam, accounting for more than 16% of the market share. Therefore, in the European and American markets, Vietnamese coffee has a lot of room to boost exports, especially when the free trade agreements (FTAs) that Vietnam has with its European and American market partners continue to have a positive impact, maintaining Vietnam's advantages in trade and investment activities.

For example, with the commitment to remove tariff barriers thanks to the Vietnam - EU Free Trade Agreement (EVFTA), the opportunity to expand the Vietnamese coffee market in the EU is very potential when 93% of tax lines are 0%. Of which, the product that benefits the most is processed coffee. In addition, the EU has committed to protecting 39 Vietnamese geographical indications related to coffee.

Along with the EVFTA, Vietnam is currently negotiating two more agreements in the European-American market, namely the Free Trade Agreement (FTA) between Vietnam and the EFTA (including 4 countries Switzerland, Norway, Iceland, Liechtenstein) and the ASEAN-Canada Agreement. Thus, with the advantages brought by the FTAs, it is expected that coffee exports in particular and exports of Vietnamese goods in general to the European-American market will grow dramatically in 2024 and the following years.

Mr. Phan Minh Thong - Chairman of the Board of Directors of Phuc Sinh Group shared that the EU is Phuc Sinh's largest market, accounting for 45-55% of the company's total revenue. In order to take advantage of the incentives from EVFTA, many Vietnamese enterprises, including Phuc Sinh, have increased investment in the processing of roasted coffee, instant coffee and 3-in-1 coffee for export to the EU market.

According to the leader of Dak Lak Provincial People's Committee, in recent years, to improve the productivity and quality of coffee for export, the province has implemented many important solutions, such as promoting the organization of sustainable coffee production with 4C, UTZ Certifed, RFA, FLO certification; producing coffee with geographical indications and continuing the coffee replanting program, striving for a total replanting area of more than 24.4 thousand hectares in the 2021-2025 period... At the same time, promoting attracting businesses to invest in building processing factories to increase the value of coffee products.

Dak Lak currently has 209 coffee processing facilities, with an annual processing output of about 496 thousand tons, including 455 thousand tons of green coffee, 31 thousand tons of ground coffee and 10 thousand tons of instant coffee. In the 2022-2023 coffee crop year, Dak Lak will export coffee to 61 markets and territories. Of which, Italy is the second largest export market with a turnover of 39.045 million USD.

Despite the available advantages, according to experts, Vietnam's coffee export activities to the European and American markets are currently facing many challenges. First of all, the structure of exported goods is mainly raw, semi-processed goods with low added value; the export market for agricultural products is still small, dependent on a number of traditional markets, unstable, lacking large customers; the logistics system still has many limitations...

Analyzing more clearly the challenges for Vietnam's export activities to the European and American markets, Mr. Ta Hoang Linh - Director of the European - American Market Department said that geopolitical conflicts continue and spread to other regions, threatening to disrupt the flow of goods; export markets are recovering poorly and are in a precarious state, people are more defensive than consuming, domestic enterprises are facing difficulties due to high input costs: Exports in the whole region are likely to continue to decrease by 4-5% (of which exports to the US decrease by about 2-3%, EU decrease by about 4-5%).

Not to mention, currently, countries are diversifying their supply sources outside of China, focusing on a number of partners close to the market and partners equivalent to Vietnam such as: Türkiye, Mexico, India, Indonesia, Bangladesh... increasing competition in Vietnam's export markets.

In that context, to maintain market share and boost coffee exports to the European and American markets, the European and American Market Department recommends that export enterprises proactively learn about the free trade agreements that Vietnam has signed and proactively develop scenarios and plans to take advantage of tariff incentives for each product line and each export market.

At the same time, the Vietnamese coffee industry needs to promote brand building, plan the development of suitable raw material areas, on par with development requirements, promote the application of science and technology, digital transformation, green transformation, and meet the strict requirements of import markets.

As for the EU market, this market is now increasingly demanding on coffee quality. The EU has tightened regulations on pesticide residues for beans, including coffee at 0.1 mg/kg. This requires importing countries to adjust their production methods to meet these standards. In addition, coffee exporting enterprises also need to pay attention to the EU's regulations on combating deforestation and forest degradation, which will take effect from 2023 to the end of 2024. Accordingly, the EU will not import products grown on deforested areas, including coffee.

“ For the European - American market area, there will be a number of labeling standards to be circulated in this market, such as the CE mark for products in the EU market, the UKCA mark for products in the UK market, and the FDA license for food and medicine products in the US market” - The European - American Market Department informed and recommended that businesses need to proactively research and register licenses and trademarks for their products suitable for each export market.

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