Vietnam will focus on improving the quality of its coffee, developing high quality seedlings to support replanting of old coffee plants and increasing the proportion of quality certified coffee, a senior official said yesterday. 

This would help the industry develop in a sustainable manner, said Nguyen Xuan Hoa, deputy general director of the Department of Processing and Trade for Agro-Forestry Fisheries Products and Salt Production, as the 17th Asia International Coffee Conference got underway in HCM City.

He said Vietnam planned to have its entire coffee production area eligible for sustainable production certification by 2020.

Vietnam had done very well in coffee exports over the past 10 years, but its development has not matched potential.

Despite being the world’s second largest coffee exporter, the Vietnamese coffee industry faced many challenges, including slow pace of diversification (of coffee varieties), lax quality management of green coffee beans during purchasing process, unhealthy competition among buyers, high production costs and low domestic consumption, Hoa said.

In addition, coffee area with certification remained modest, he added.

“The country currently exports coffee in the form of green beans with preliminary processing, which keeps its value low. There is very little branding and proper packaging,” Hoøa said.

Le Van Toi, chairman of the Vietnam Coffee and Cocoa Association, said old coffee plants covered over 130,000ha of the total of 510,000ha under cultivation. “This will increase to 50 per cent in the next 10 years,” he said.

“The decline in coffee production is very clear,” he said, adding “it will be difficult for Vieät Nam to keep the position of second largest coffee producer and exporter if the Government does not take prompt action to finance the tree renovation programme”.

To help the sector develop in a sustainable manner, Hoøa said the Vietnamese government has mapped out a policy to promote higher value-added coffee production and processing, with a focus on quality management combined with trade promotion activities. The aim was to impact all the steps in the value chain from farm to market, he said.

The plan was also to create more competitive and higher value-added products, and to boost domestic consumption.

Vietnam will offer incentives for businesses to invest in technology and modern equipment and increasing its instant coffee production capacity from the current 10,000 tonnes per year to 20,000 tonnes and 30,000 tonnes per year by 2015 and 2020, respectively.

Toi said the Government should encourage local and foreign companies to invest more in roasted and instant coffee to add value to the coffee production.

World coffee production for 2011-12 is forecast at 127.4 million bags (a bag is equal to 60 kilos), down 5.7 million bags compared to the last crop because of adverse weather conditions that could have a negative impact on production and post harvest activities in a number of exporting countries, particularly in Central America and Indonesia, according to Toi.

Roberio Oliveira Silva, executive director of the International Coffee Organisation, said coffee production in Brazil, Vietnam and Indonesia - three leading coffee producers - were expected to fall during the 2011-12 crop. Inventories were also forecast to remain at diminished levels.

“World coffee consumption, meanwhile, has a very stable increase over the past 10 years in both producing countries and emerging markets,” he said.

Vietnam produced about 1.2 million tonnes of coffee beans in the 2010-11 crop and exported 1.1 million tonnes worth US$2.6 billion, an increase of 6.56 per cent in volume and 56 per cent in value, Töï said.

The country’s coffee export for the 2011-12 crop was forecast to be lower than the last crop since production had not risen and inventory has reduced.

However, local consumption was increasing and would account for about 100,000 tonnes in the next crop, he said.

The capacity of processing facilities for green coffee beans have reached to more than 1 million tonnes per year, contributing to improved quality.

Some companies, including Vinacafe, Nestle and Olam, have invested in facilities to make more instant coffee for domestic consumption and export.

Next crop, the association would buy between 200,000 and 300,000 tonnes of coffee for temporary storage to support farmers, the conference heard.

Vietnam has around 510,000ha under coffee cultivation, mostly of the robusta variety.

The higher value arabica variety is grown in some other provinces in the north, central and Central Highland regions. 

(Source: Vietnamnet)