Improving coffee quality and building brands are essential for Viet Nam to expand export to the EU, according to the Ministry of Industry and Trade.
The EU, the world’s largest coffee market accounting for nearly 48 per cent of the world’s total coffee imports, is a huge potential market for coffee exporters.
The EU is also the biggest importer of Vietnamese coffee, accounting for more than 16 per cent of Viet Nam’s total coffee export.
The Viet Nam – EU Free Trade Agreement (EVFTA) which removed 93 per cent of tariffs, including processed coffee, opened significant opportunities for Vietnamese coffee, according to the ministry, adding that coffee was also one among 39 geographical indications of Viet Nam that the EU committed to protection under the EVFTA.
Viet Nam and Brazil, two major coffee exporters, both have trade agreements with the EU, meaning that both enjoyed preferential tariffs when exporting coffee into the EU. However, Brazil mainly supplied Arabica coffee while Viet Nam focused on Robusta.
The ministry said that the potential for coffee export to the EU was considerable thanks to the increasing demand for processed and high-quality coffee.
However, Vietnamese coffee lacked established brands in the global market as processed coffee was mainly exported under foreign brands. This means it will not be easy to build a brand for Vietnamese coffee in the long term, which could undermine the competitiveness.
The Vietnamese coffee industry needs change to improve quality, ensure origin traceability, and comply with regulations on intellectual property and building brands.
The post-pandemic recovery provided significant opportunities for Vietnamese coffee export companies to expand in the EU market.
The UK– Viet Nam FTA helped Vietnamese coffee become more competitive than countries that do not have an FTA with the UK.
The ministry forecast that Viet Nam’s coffee export to the EU will increase in the next two years, driven by advantages in export tariffs and moves to improve product quality.
The ministry urged Vietnamese companies to focus on improving quality and building brands for coffee to enhance competitiveness as competition from other major exporters like Brazil, Colombia and North America grows fiercer.
However, the ministry noted that the shortage of containers and rising logistics costs this year created a considerable barrier to exports.
Thai Nhu Hiep, chairman of Vinh Hiep Company, which exports about 50-70 tonnes of coffee, 60 per cent of which are shipped to the EU, said that to enter the EU markets, coffee products must ensure that there are no residues of pesticides and comply with strict quality regulations of the market, including traceability and geographical indications.
The ministry’s statistics showed that Viet Nam’s coffee exports to the EU in 2021 were estimated at 556,000 tonnes, worth more than $1 billion, increasing 7.9 per cent in volume and 6.3 per cent in value compared to 2020. — VNS