'Dislike' businesses, farmers prefer to sell to traders

At the workshop “Solutions to achieve 5 billion USD in coffee exports”, organized by Nguoi Lao Dong Newspaper on the afternoon of March 30 within the framework of the second “Honoring Vietnamese Coffee and Tea” festival in 2024 taking place in Thu Duc City (HCMC), representatives of businesses, management agencies and experts proposed many solutions and recommendations to bring Vietnam's coffee export turnover to 5 billion USD/year.

Assessing the price of coffee from the beginning of 2024 until now, Mr. Nguyen Hai Nam, Chairman of the Vietnam Coffee - Cocoa Association, said that the price has increased continuously and is currently at 102,000 VND/kg. Coffee prices have increased so much that there is a situation where farmers do not sell to exporters but sell to agents and traders.

According to Mr. Nam, this leads to a disruption in the supply chain, so the association has a plan and warns businesses.

Conference scene. Photo: Nguyen Hue

Data from the Vietnam Coffee and Cocoa Association shows that in the first quarter of 2024, the country's coffee export turnover reached 600,000 tons. If calculating the unit price of 3,200 USD/ton, the total coffee export turnover in the first 3 months of this year reached about 1.9 billion USD.

Master Nguyen Quang Binh, a coffee analyst, said that with the current price, the target of coffee export turnover of 5 billion USD this year is certainly achievable. However, the high domestic coffee price also causes many difficulties for export.

Because, if calculated by exchange rate, the domestic coffee price is about 3,800 USD/ton, higher than the price of coffee traded on the London futures exchange. This is a commodity market, so wherever the price is high and goods are scarce, traders will go elsewhere to buy.

“The quality of Vietnamese coffee is unquestionable, but behind the price increase there is a force that stimulates prices like the real estate market. Before, they bought the whole garden. But now they buy 5 tons here, 7 tons there and then push the price up,” said Mr. Binh.

This expert commented that Liberica coffee prices have never been as high as Arabica coffee prices. It can be said that the domestic coffee market is in chaos. Farmers enjoy high prices, however, exporting enterprises will face many difficulties with contracts signed from now until 2026 but not yet delivered.

Coffee analyst Nguyen Quang Binh. Photo: Nguyen Hue

In order for coffee export turnover to reach 5 billion USD steadily in the coming years, according to Mr. Binh, there needs to be a coffee commodity fund. Like in other countries, when they export 6 billion USD, they will allocate 600 million USD to the fund to support purchasing. The State Bank should have such a credit fund to support capital for coffee purchasing enterprises.

Another solution, according to Mr. Binh, is to increase the production and processing of specialty coffee. If the price of regular coffee is 4,000 USD/ton, the price of unroasted specialty coffee is at least 6,000-8,000 USD/ton. Therefore, it is necessary to support businesses that produce and process specialty coffee to increase the value of coffee beans.

Need to invest in building and promoting Vietnamese coffee brand

Talking about the domestic coffee picture, Mr. Do Ha Nam, Chairman of the Board of Directors and General Director of Intimex Group Corporation, assessed that in the 2022-2023 crop year and early this year, Vietnam's coffee export turnover grew impressively thanks to record high selling prices, reaching 100,000 VND/kg.

While for a long time before, coffee prices did not exceed 50,000 VND/kg, many farmers cut down coffee trees to plant other trees. At the beginning of this year, coffee prices increased sharply, businesses had a hard time buying coffee for export.

With the current coffee market developments, Mr. Nam affirmed that the export turnover target of 5 billion USD/year is within reach.

“In reality, Vietnamese coffee is an irreplaceable product in the European market. We tried buying coffee from other countries to make instant coffee but could not get the taste of Vietnamese instant coffee. The world market did not accept it,” Mr. Nam shared.

Mr. Do Ha Nam: The target of 5 billion USD coffee export turnover in 2024 is within reach.

Regarding the story of brand building, according to Mr. Nguyen Duc Hung, Director of Napoli Coffee Import-Export Production Trading Joint Stock Company, on average each province and city in our country has about 100 coffee enterprises; Ho Chi Minh City alone has about 2,000 enterprises.

Mr. Hung has traveled to many countries and found that very few Vietnamese coffee brands are sold. Compared to Thailand and Malaysia, the market coverage of Vietnamese coffee businesses is limited. “In addition to policy support, businesses themselves must promote international marketing to develop their brands,” Mr. Hung noted.

Meanwhile, Mr. Gruber Alexander Lukas, representative of the Alambé Finest Vietnamese Coffee brand, said that if Vietnam wants to achieve a coffee export turnover of 5 billion USD/year, "it should not commoditize coffee but personalize it".

According to him, Vietnamese coffee is famous for its quantity and low price. Therefore, it is necessary to invest in building a brand, creating unique quality, classifying from standard to premium... to export coffee with added value.

From a management perspective, Mr. Le Thanh Tung, Deputy Director of the Department of Crop Production in charge of the South (Ministry of Agriculture and Rural Development), said that to improve competitiveness in the international market, Vietnam needs a systematic strategy for developing high-quality coffee.

Our country currently has about 660,000 hectares of coffee growing land. Of which, specialty coffee accounts for only 2% of the area, concentrated in Lam Dong and organic coffee accounts for 3% of the area.

Therefore, the upcoming solution, according to Mr. Tung, is not only a matter of technology, processing, and market development, but also how to harmonize the interests between the producer and the exporter to promote the value chain for coffee beans.

Coffee fever: The whole world is hunting for coffee after gold and oil. Coffee prices are skyrocketing and showing no signs of cooling down globally, with Vietnam recording an all-time high. This bean is becoming a "hot" commodity, ranked second only to gold and oil by world investors.