Viet Nam expands instant coffee exports, expects growth of 25%

This information was released at a meeting that reviewed the 2014-15 coffee crop and set tasks for the next crop. It was held by the Viet Nam Coffee and Cocoa Association (VICOFA) in Ha Noi on Thursday.

The coffee harvest in Viet Nam, the world's second-largest producer after Brazil, runs from October to September.

VICOFA Deputy Chairman Nguyen Nam Hai said instant coffee factories had sprouted in the country as both domestic and foreign businesses had poured into the sector.

Hai said both domestic coffee suppliers and foreign-funded growers had ceaselessly expanded investment in their instant coffee processing plants and had enhanced the quality of their coffee products to expand markets.

These plants consumed large volumes of coffee beans and boosted instant coffee exports, Hai said.

According to a report by VICOFA, the volume of instant coffee exports in 2014 reached about 54,000 tonnes, accounting for 3.2 per cent of the total export quantity, with revenues of nearly US$274 million that account for 7.7 per cent of the total turnover.

By the end of 2015, the volume of instant coffee exports could increase by 25 per cent year-on-year, the VICOFA said.

The total coffee output in the 2014-15 period had decreased by more than 20 per cent, compared with the previous season, due to bad weather, outdated harvesting technology and poor processing facilities.

In September alone, the total coffee exports touched nearly 92,600 tonnes, worth more than US$186 million, registering a 4.9 per cent fall in volume and 13 per cent fall in revenue year-on-year, the report said.

The country exported 1.25 million tonnes of coffee during the 2014-15 period, with a turnover of $2.62 billion, which was a 21.9 per cent fall in volume and a 20.1 per cent drop in turnover compared to the same period last year, the report said.

Hai said 1kg of raw coffee beans was sold at only about $2, while 1kg of instant coffee cost about $10, elevating instant coffee as a high value-added product for export and domestic consumption.

Many foreign-funded growers were pouring money into instant coffee processing factories and, therefore, domestic enterprises needed to renovate technologies in order to compete with foreign businesses, Hai said.

In the 2014-15 period, Germany and the United States remained the two largest markets of Vietnamese coffee, with the export volumes reaching nearly 201,000 tonnes and more than 145,000 tonnes, respectively, Hai said.