Data from the General Department of Customs show that in the first 7 months of 2022, Vietnam’s coffee exports reached 1.13 million tons, with a turnover of 2.56 billion USD, up 17.3% in volume and 43.6% in turnover over the same period in 2021.
The average export price of coffee in the first 7 months of 2022 was 2,261 USD/ton, up 22.5% over the same period in 2021.
In the first 7 months of 2022, Vietnam’s coffee exports to major markets: the EU and Japan, were higher than in the same period in 2021. Specifically, exports to the EU increased by 31.6% in volume and 61.1% in turnover, equivalent to 449.5 thousand tons of coffee exported, with a turnover of 977.2 million USD. Exports to Japan reached 69.3 thousand tons, equivalent to a turnover of 175.3 million USD, up 2.7% in volume and 34.9% in turnover.
In July 2022, Vietnam exported 125 thousand tons of coffee, equivalent to a turnover of 284 million USD, down 9.0% in volume and 9.9% in turnover compared to June. Compared to July 2021, this number was an increase of 11.4% in turnover, but lower by 6.8% in volume.
Coffee’s average export price in July was 2,272 USD/ton, down 1.0% over June 2022.
The Foreign Trade Agency explained that the decline in volume and export turnover of coffee was due to China’s “Zero COVID” policy. In addition, the tension of geopolitical in Eastern Europe resulted in increased inflation, weakened consumer demand, and lower coffee prices.
The Vietnam Coffee - Cocoa Association (Vicofa) assessed that there would be hardship in terms of consumermarkets for Vietnam’s coffee until the end of 2022. In the third quarter of 2022, there remains 500 thousand tons of coffee for exports. If the conflict between Ukraine and Russia does not end soon, the coffee price will stay low in the remainder of the third quarter.
The International Coffee Association also forecast that the global coffee industry would face short-term difficulties due to recession and slow consumer demand. The Russia – Ukraine conflict will affect the global coffee demand, creating a surplus in the 2022/2023 crop year. Russia's coffee consumption is projected to drop by nearly 1 million bags; Ukraine about 400,000 bags.
Referring to the goal of coffee export turnover of 4 billion USD set for 2022, Vicofa said that although there are still many difficulties due to objective fluctuations, if the export price of coffee exports remains at the same high level as in the first half of the year, the whole year 2022 Vietnam's coffee industry can still set a record turnover of 4 billion USD.
(First half 2022)
Vinh Hiep Company Limited, Intimex Group Joint Stock Company, and Daklak September 2nd Import - Export Company Limited were the top 3 coffee exporters in Vietnam in the first 6 months of 2022, with export turnovers of 166,658 thousand USD, 142,247 thousand USD, and 138,325 thousand USD, respectively.
In fourth and fifth places were Intimex My Phuoc Joint Stock Company and Louis Dreyfus Company Viet Nam Trading and Processing Co. Ltd, with export turnovers of 124,636 thousand USD and 90,114 thousand USD, respectively.
According to the Foreign Trade Agency, the EU is currently Vietnam’s largest coffee exporting market. In the top 10 coffee export markets of Vietnam, there are 5 EU countries, accounting for 35.5% of total coffee export turnover, of which coffee exports to Belgium and the UK recorded triple-digit growth.
In addition to the supply-demand factor, the Vietnam - EU Free Trade Agreement (EVFTA) also contributes significantly to helping Vietnam's coffee industry increase value and expand market share in the EU.
“Despite inflation hitting a 20-year high, coffee exports to the EU are still growing well, because coffee is an essential commodity, an indispensable drink in Western countries. On the other hand, the tariff advantage from the EVFTA Agreement also brings a great incentive for coffee exporters to this market,” said Vicofa.
Coffee is one of the 13 key agricultural products of Vietnam. The coffee industry contributes 3% of the country's GDP, creating jobs and stable incomes for over 600,000 farming households. Particularly for the UK market, the Vietnam - UK Free Trade Agreement (UKVFTA) took effect, bringing many prospects to the Vietnamese coffee industry in this market.
The Ministry of Industry and Trade said that Vietnamese businesses need to quickly take advantage of the opportunities brought by UKVFTA. According to UKVFTA's commitment, after 6 years since UKVFTA takes effect, the UK will eliminate import tax on 99.2% of tariff lines, equivalent to 99.7% of Vietnam's export turnover.
Source: The Ministry of Industry and Trade
Compiled by VietnamCredit