Hanoi (VNS/VNA) - While Vietnam's coffee industry was on track foranother record export year, driven by rising prices due to supply shortages,experts said it's time for the industry to focus on quality to increase addedvalue and export sustainably.

According to the Ministry of Agriculture and Rural Development, Vietnam wasexpected to earn 4.2 billion USD from exporting 1.7 million tonnes of coffeethis year, a new high after setting the record at more than 4 billion USD lastyear, providing a firm foundation for the export target of 6 billion USD by2030.

Pham Quang Anh, director of the Mercantile Exchange of Vietnam’s InformationCentre, said Vietnamese coffee exports could reach a record level this yearthanks to domestic and global prices climbing to their highest levels in thepast 15 years due to scarce supply, low coffee reserves, and a strong increasein global demand for Robusta.

Statistics from the General Department of Customs showed that Vietnam’s coffeeexports reached 1.266 million tonnes worth 3.16 billion USD from January toSeptember, a drop of 7.3% in volume but an increase of 1.9% in value over thesame period last year.

The average export price was 2,499 USD per tonne during this period, 9.9% higherthan the same period last year.

The average price in September was 3,151 USD per tonne, 3.2% higher than Augustand 29.6% higher than one year ago.

Despite strong exports, Vietnam's coffee industry faces uncertainty inmaintaining exports at high levels in the long run because the exports remainheavily dependent on rising prices due to supply shortages, not on the addedvalue of coffee products.

This fact urged the coffee industry to shift its focus to improving productquality and aligning with market taste trends, especially in the major coffeeconsumption markets, which accounted for around half of global coffee imports,including the EU and the US.

Customs statistics showed that Vietnam shipped 600,000 tonnes of coffee to theEU and the US in the first eight months of this year, representing 50% of thecountry's total coffee export volume.

Major coffee import markets were transitioning from importing Robusta coffeebeans to processed coffee.

According to the US Department of Agriculture, the US was becoming increasinglyreliant on Arabica coffee and has progressively reduced Robusta imports from6.1 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 anestimated 6.4% in 2023-24.

According to the European Coffee Federation's statistics, the percentage ofprocessed coffee surged from 2.3% in 2017 to 5.5% in 2021.

Vietnam’s customs data also indicated a significant drop in Vietnam’s Robustacoffee bean exports to the US, decreasing from 130,200 tonnes in 2018 to 90,500tonnes in 2023, representing a decline of 27%. Vietnam predominantly exportedraw beans to the US, a trend that remained largely unchanged from five yearsago, indicating that Vietnam has been slow to adapt to the evolving tastes ofmajor markets.

Climate change was occurring globally, leading to extreme weather phenomenalike El Nino and La Nina, which directly affected the coffee crop.

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

A Bloomberg survey estimated that coffee output might be 7% lower than theprevious harvest season.

While coffee prices remained high, Vietnam was currently short of coffee forexport. The Import-Export Department under the Ministry of Industry and Trade(MoIT) mentioned that the nation’s exports in the third quarter were slowingdown due to limited supply.

The coffee supply was anticipated to increase in November when the 2023-24harvest season began.

Anh emphasised the importance for the coffee industry to concentrate on qualityand enhance the added value of coffee products through processing to boostexports.

Enterprises and farmers should collaborate to establish production chains,making it more feasible to adopt modern technology and promote the shift fromraw to processed coffee, he suggested.

Increasing processed coffee could be a solution for Vietnam to boost exports,benefiting from signed free trade agreements that offer preferential tariffs of0-5% for processed coffee products, Tran Thanh Hai, deputy director of theImport-Export Department (MoIT), stated.

Hai stressed that the coffee industry couldn't separate itself from the globalcommodity market, which was being influenced by rising inflation, geopoliticalimpacts, increasing input costs, and heightened competition from majorproducers like Brazil and Indonesia.

All these factors would influence coffee prices, Hai said, urging companies toclosely monitor the market for suitable business and production strategies.

He encouraged businesses to intensify trade promotions to broaden markets whileconcentrating on quality raising and processing to meet the demands ofimporting markets and to establish brands for sustainable exports./.