“When selling 1kg of green coffee, we collect about 2 USD (equivalent to the average price of 1 cup of coffee in importing countries), while each coffee bean can be mixed with 50 cups of coffee. In terms of volume, coffee accounts for 20% of the world market share, but the value is only about 2% of the world coffee market share ”- That is the judgment of Vietnam Cocoa Coffee Association on the status of coffee processing in our country today.
1kg of Vietnamese coffee is sold for only US $ 2, but foreign buyers in processing, packaging and printing labels sell up to US $ 200.
Specifically, according to Vietnam Coffee and Cocoa Association, in 2016, coffee exports of our country ranked second in the world with output of 1.78 million tons (reaching 3.34 billion USD), up 32.8 % in volume and 25% in value. But the export value of our country’s coffee is still low, mainly due to the export of raw materials.
When selling 1kg of green coffee, we collect about 2 USD (equivalent to the average price of 1 cup of coffee in importing countries), while each coffee bean can be mixed with 50 cups of coffee. In volume, coffee accounts for 20% of the world market share, but the value is only about 2% of the world coffee market share.
Vietnam is proud to be the world’s leading exporter of coffee materials, but who benefits and creates this value? Mr. Michael H.Nguyen, Deputy General Director and Chief Financial Officer of Masan Group, said: 1kg of Vietnamese green coffee sold for 2 USD, but when Starbucks bought and processed and labeled this brand then selling up to 200 USD, generating 100 times more profit. Therefore, in every coffee signing, Vietnam only gets 10% of the coffee value chain and the rest is fully enjoyed by foreign businesses.
To increase coffee export profits, domestic enterprises must export refined coffee instead of buckwheat coffee. Still know that, but not many businesses choose to export refined coffee. Right at the coffee export capital of our country is Dak Lak, only An Thai Coffee Company and Trung Nguyen Coffee Company exported 4,520 tons of instant coffee, accounting for 2/3 of the quantity and 7.5% total coffee export turnover of the province. The remaining 15 coffee exporters choose the way of exporting coffee beans.
Each 1 cup of green coffee brews up to 50 cups of coffee, but the price in Vietnam is equivalent to only 1 cup of coffee in importing countries.
According to many coffee exporters in Dak Lak, large roasters in foreign countries often import Vietnam ‘s buckwheat coffee, then process and pack them into their products. When importing, they are interested in many production processes, not interested in our coffee brand. The export of green beans only requires little investment, quick turnaround and easy to sell products. Meanwhile, in order to export refined coffee, it is necessary to invest in building a factory with big capital, difficult to find markets for consuming and consuming efforts to build a brand. Therefore, businesses in our country often choose the way to export coffee to push the effort to find markets and build brands. It was this approach that reduced the added value for Vietnamese coffee.
Even in the domestic market, our coffee exporting enterprises are often left behind by foreign-invested enterprises (FDI). Until the coffee harvest season, FDI enterprises in the Central Highlands pushed up high purchasing prices and bought most of the output of green coffee here for processing. Many domestic coffee exporters even have to buy their coffee products at a higher price to supply the signed orders to foreign businesses despite losses. Meanwhile, domestic enterprises are not allowed to borrow foreign currency to buy exported coffee, while FDI enterprises are allowed to borrow foreign currency at very low interest rates. This also reduces the competitiveness of agricultural export enterprises with FDI enterprises in the same business.
To regain profits and added value for Vietnamese coffee, we first need to improve and complete the process of producing and processing domestic coffee. In addition, the Government needs to have clear mechanisms and policies and take measures to support loans for coffee exporting enterprises. Supporting, accompanying businesses is also one of the ways to bring added value to Vietnamese coffee.
Product of Duong Cafe
Instant coffee (20 Packs)
Instant white coffee (180g)