REPORT PRACTICES OF INTERNATIONAL TRADE topic export the vietnamese coffee

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION INTERNATIONAL BUSINESS REPORT PRACTICES OF INTERNATIONAL TRADE Topic: Export the Vietnamese coffee Lecturer: Nguyen Thi Tuong Vy Group: Sunflowers, Tuesday and Thursday Ho Chi Minh City, 8th November 2020 Full name Nguyen Thi Hong N Huynh Muoi Lu Nguyen Thi Thuy Tran Ha My Hie Hinh Van Ty Hoa Hong Phuc COMMENTS FROM LECTURER ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… Table of Contents INTRODUCTION Chapter 1: Overview of the coffee and export activities in Vietnam 1.1 Overview of Vietnam’s coffee market and produc enterprises 1.1.1The formation and develo 1.1.2Overview of the situation 1.1.3Overview of coffee consu 1.2 Theoretical about the export Chapter 2: The actual situation and the process of exporting coffee from Vietnam to other countries: Analysis and Evaluation 2.1 The situation of coffee Exports Vietnam 2.1.1The situation of coffee p 2.1.2The main types of Vietna 2.1.3Price export coffee 2.2 The general process of exporting goods 2.3 Some documents in the coffee export trade contr 2.4 Government policies 2.4.1Free trade agreements 2.4.2Impacts of the state to su 2.5 SWOT 2.5.1Strengths 2.5.2Weakness 2.5.3Opportunities 2.5.4Threats Chapter 3: Solutions to boots Vietnam’s coffee to overseas Conclusion Conferences INTRODUCTION Until now, Vietnam is one of the famous countries for farming and agriculture forestry, some popular products are rice, tea, rubber, and coffee When it comes to coffee, Vietnam is internationally rated as the second country in terms of exports, this shows that coffee is an industry that has, is and will have a lot of potential and opportunities to develop Except for those who are drunk with coffee, we can say coffee is an indispensable drink of the day Each person has a different habit and taste of coffee, some people like the bitter taste but others love the sweet taste, some people use coffee when they work tired but also people use it during appointments with a partner or friend And just like that, coffee accidentally holds a fixed position in the hearts of Vietnamese people, even foreign tourists Joe Vinson has researched that coffee is an indirect product so that people can partially reduce the risk of cancer because coffee contains antioxidants Besides, coffee also has many other benefits such as keeping the body awake, burning excess body fat, and strengthening muscles With such positive impacts along with reasonable prices, abundant human resources and natural conditions in Vietnam, coffee is increasingly known by many foreign businesses and we also willing to cooperate with them In general, coffee is one of the popular and highly attractive beverages in Vietnam in particular and other countries in the world, it is demonstrated through competition for different purposes from businesses FDI enterprises to compete for a market share of coffee companies in the world as well as coffee chains on foreign markets are increasing What makes coffee so attractive? Are you curious about its birth as well as other useful information in export activities from Vietnam to foreign countries? If yes, hopefully, this report will bring you lots of useful information Research purposes: - Present information you need to know about coffee export markets from Vietnam to foreign countries Show the general process of exporting List the positive and negative aspects of the Vietnamese coffee market and take out solutions Research subjects: Vietnamese coffee exports Research scope: - Theoretically: the influencing factors and the evaluation criteria for coffee export activities in Vietnam, thereby giving solutions to promote the development of coffee products on the market for exporters - Research methodology: using relevant knowledge about list, analysis, statistics, synthesis, and comparison to evaluate coffee export activities in Vietnam Applying SWOT for in-depth analysis and giving optimal solutions to boost coffee export to foreign markets Structure of the report: - Chapter 1: Overview of coffee and export activities in Vietnam Chapter 2: Current situation and the process of Vietnam's coffee export to other countries: Analysis and evaluation Chapter 3: Solutions to boost Vietnam's coffee exports to foreign countries Photo by: brandsvietnam.com Chapter 1: Overview of the coffee and export activities in Vietnam 1.1 Overview of Vietnam’s coffee market and production – export activities of enterprises 1.1.1 The formation and development of the coffee industry Where is coffee come from? The first coffee beans were brought into Vietnam by the French, the first coffee variety was introduced in our country in 1857 through several French missionary priests The first is experimentally planted in Catholic churches in some northern provinces and then the coffee tree is planted and then expanded to Thanh Hoa, Nghe An, Ha Tinh and then spread to the central provinces such as Quang Tri, Quang Binh In the period after the war, the coffee tea gardens here continue to be maintained Therefore, this area has a very high distribution of coffee and tea trees Finally, new coffee trees gradually developed into the South Central Highlands and Southeast and people began to realize that the Central Highlands was the most suitable place to grow coffee trees From there, gradually popularized in Egypt and Yemen, and many countries around the world Until now, when it comes to the euphoric drink, coffee is a must-have product Coffee trees are thriving and the area to grow them is growing The Central Highlands has become the region with the largest Robusta coffee growing area in our country both in size and reputation, nowhere in Vietnam has a famous domestic and international coffee, and at the same time with a famous region bearing many legends like Buon Ma Thuot coffee After the liberation period of the country's coffee area was about 20 thousand hectares, thanks to the international capital support, coffee trees were gradually focused, until 1980, the cultivated area continued to increase and export with thousands of tons The original plan was built in 1980 and set a target for Vietnam's coffee industry to have about 180 thousand hectares with an output of 200 thousand tons After that, this plan was revised many times and the highest number stopped at 350 thousand hectares with an output of 450 thousand tons (VICOFA, 2002) Currently, Vietnam's coffee plays an important role in the strategy of boosting Vietnam's agricultural exports and the main export market is the EU market 1.1.2 Overview of the situation Vietnam coffee export According to information sources, at present Vietnam has become the second country in the world producing and exporting the coffee industry In general, Vietnam's coffee market accounts for nearly 5.6 billion USD, but in 2020, the COVID-19 epidemic has impacted the market price of coffee to decrease to 4.8 billion USD, this makes the production - export situation more difficult However, it is expected that this price will increase again in the coming years with the expected figure to reach more than billion USD about five years later Regarding production: According to the Import and Export Department, in 2020, due to the impact of many problems from nature, epidemics will lead to many problems in coffee production Specifically, in the Central Highlands region, coffee production tends to decrease due to severe water shortages, in addition to the impact of drought, thousands of cultivated areas are wilted and burned Hence, the Vietnam Coffee - Cocoa Association believes that this year's production is expected to decrease by 15% Regarding exports: in 2019 - 2020, Vietnamese coffee is generally less competitive than other countries and thus leads to a large reserve due to low exports Depending on the extent of the damage, the farmers have to increase measures to help the coffee tree grow as well as restore the growing area, also, many people switch to intercropping other crops due to low coffee export prices this year According to AsemconnectVietnam, within the first eight months of 2020, Vietnam has exported about over 1.15 million tons with a turnover of $ 1.97 billion Regarding varieties: the most popular coffee in foreign markets is still Robusta coffee but in volume and value it has decreased significantly compared to the previous years, according to the latest calculation from the General Department of Vietnam Customs, in the first months of 2020, Robusta coffee exports reached 983 thousand tons with a value of US $ 1.46 billion, generally down 2.4% in volume and 4.6% in value compared to the same period in 2019 Regarding coffee export prices: price data is still being updated daily but according to the most specific data that the General Department of Vietnam Customs said in the first months of 2020, the country exported more than 1, million tons of coffee and earned 1.79 billion USD with an average price of 1,699.9 USD / ton Compared to the same period last year, exports decreased 1.1% in volume, 1.5% in turnover and 0.4% in price This is also an unavoidable thing because in 2020 the world will be affected by many difficulties from natural conditions to serious epidemics 1.1.3 Overview of coffee consumption in foreign markets As you know that Robusta coffee of Vietnam is the product that is exported and consumed the most in the foreign market, However, this is also uneven, for example, increases in countries such as Japan, Korea, Belgium, and decreases in countries such as the Thailand, America, , Regarding the consumer market, also due to the epidemic COVID 19, most people turn to enjoy at home instead of buying from stores and supermarkets In particular, Robusta coffee processed in the form of instant coffee is the most preferred product by foreign consumers, especially the Russians, this country has per capita consumption per capita after only two countries British and American However, recent information shows that the people of this country are tending to consume more powdered and bean roasted coffee a/ Factors that foreign consumers are interested in when buying coffee: - Clean diet: it can be said that nowadays, consumers prefer clean coffee over blended coffee like before, they prefer to go to local pure coffee roasters These stores are growing day by day and these companies claim that they only sell 100% clean coffee without any impurities Part of the reason is to hit on current consumers' fear of dirt and the rest is that they are more interested in pure, organic coffee, this is considered an opportunity for businesses to participate into this market - Fast, convenient: Recently the CocaCola market just entered the Georgia Coffee Max instant coffee market, the price of a can of coffee is equal to a can of iced coffee on the sidewalk and they think that the goal is only for people Consumers like us can change habits and pay attention to faster and more convenient products From this perspective, Vietnam can research to develop these models and types of products in the near future in order to meet customer needs Illustration picture by: Dalgona Coffee – Schaumkaffee Source: https://www.sweetsandlifestyle.com/ b) The tastes of consumers: For Vietnamese exported coffee, instant coffee is a favorite Russian product, its average consumption is second only to the US and UK However in recently, due to the factors of a eat clean and minimal style that they tend to switch to powdered and roasted coffee In addition, foreigners also love to enjoy Passiona coffee, this is a product that women often love due to its low caffeine content, collagen supplements, anti-aging substances along with some herbs from the East and also reduce the sugar Businesses also added that drinking this coffee will help maintain a perfect skin, this type of coffee has been developed and researched for years and now in Vietnam appears this coffee It is only priced at about 44.000 VND from Trung Nguyen brand In the past coffee was favored by men because they needed alertness to work, but recent analysis illustrates that both women and children love its for its because of organic products has the effect of losing weight as well as maintaining physique If women often drink coffee for a specific health reason, young generation prefer coffees that are blended with other ingredients such as matcha, cream cheese, and new innovations like dalgona coffee or fruit coffee 1.2 Theoretical about the export a/ Definition of export: Export is a term for goods that are domestically produced and sold in foreign markets, a word commonly encountered in various economic sectors, especially international trade We have learned about net exports in Macroeconomics, so we can understand that if net exports are positive - exports are greater than imports, there is a trade surplus in the country b/ The roles of exports to the economy: For the global economy: when it comes to the word "global", especially with import and export activities, it means that this is not simply a single issue between buyers and sellers in the same country as well, but it includes This includes the vast scale of global trade Exporting can be said to be the first activity in international trade with the main goal of consuming the products that people (businesses) produce and making an important contribution in the process of developing a country's economy in a strong and sustainable manner For the economy of each country: one thing we can not be denied that exports are one of the main activities that drive economic growth and development, or in other words that export is one of the ways that a country is made rich Some of the roles of export activities we can mention are: expanding consumption markets; promote specialization, processing production chain, economic restructuring; pioneering expensive leads to many other industries with development opportunities, and most importantly, building good relationships between foreign-investedå enterprises c/ The roles of exports for firms: If we successfully export our goods, our brand will surely be known by friends from all over the world and will give our business many opportunities to grow In addition to the expansion of products of businesses in consumer markets, export of goods will help them have more foreign currency, increase their creativity in work to innovate and improve products every day Although this activity will be competitive, they will be able to learn a lot of expertise, how to create products with the most resources and cost savings and sometimes even scalable for cooperation on both sides is beneficial d/ The theory of comparative advantage by David Ricardo: Comparative advantage is a concept mentioned by Ricardo in his work The Principle of Political Economy and Taxation, which shows the ability of a product to be produced at a lower cost than to produce the product other It can be said that this is the basic foundation of international trade, David Ricardo has successfully inherited and developed Adam Smith's absolute theory A rule has been drawn by him in the issue of import and export: countries should focus on specialization on the production - export of goods when they have a comparative advantage and import goods when the country There is no comparative advantage By doing this, the total global production of products will always tend to increase e/ Some other theoretical models in international trade: Heckscher - Ohlin model: This model predicts that a country will export the products for which it has a resource strength and vice versa On the basis of the difference between the resource factors, it is identified and assumed to be the structure of international trade However, there are still many studies showing conflicting results Attractive model: this model is mainly inclined towards quantitative analysis, it predicts that trade exchange depends on geographical distance and the size of the economy between two countries Many extensions of this model refer to many other factors such as income level, diplomatic relations, and trade policies of each country - Chapter 2: The actual situation and the process of exporting coffee from Vietnam to other countries: Analysis and Evaluation 2.1 The situation of coffee Exports Vietnam 2.1.1 The situation of coffee production and export in Vietnam in recent years a/ Regarding production: According to data from Vietnambiz newspaper about Vietnam's coffee market in the first months of 2020, the production situation in the Central Highlands has had weather difficulties that reduce crop yields According to information from the Ministry of Industry and Trade, since the beginning of the dry season, water shortages occurred in many localities, prolonged heat and heat resulted in the exhaustion of water sources from streams and lakes In addition to natural conditions, the continuous decrease in coffee prices also causes the coffee area of cultivation and production processing to decrease Because there are not many changes compared to the end of last year, in order to improve economic efficiency, some businesses in Dong Nai have invested in coffee deep processing plants to boost exports as well as increase the profits Followed by the export situation continued to update in the second quarter of 2020, according to the import-export department, as the supply was limited, coffee prices in some domestic markets increased from the beginning of May The influence of Covid-19 makes both supply and demand decreased and some factors impact from nature such as: drought, flood and severe water shortage, leading to a sharp decrease in production output b/ Regarding export: Table 2.1.1 Statistics of Vietnamese coffee exports Year Volume (tons) Value (USD) Designed by Sunflowers Team We have synthesized ourselves based on information from websites as well as articles, table 2.1.1 reveals that these are general data on the coffee production situation of our country in recent years Generally in the period 2015-2019, there are uneven changes and have alternating increasing and decreasing between years Specifically in 2015, due to weather factors such as severe drought when the coffee trees are growing, rain comes early at harvest and although the business had replanting programs but the process takes place still quite slow, this is a quite challenging year for the coffee industry However, in 2016 the situation seemed to be better when the cultivated land area increased by 0.3%, although the impact of drought in the Central Highlands earlier this year caused coffee yield to decrease by 0.4% but overall the whole year still increased 1% compared to the previous year, the experts said that in 2016, Vietnam started to sign a few free trade agreements making the export of coffee, especially coffee products processing to foreign countries has become easier and more beneficial Until 2017, coffee exports decreased slightly due to a decrease in domestic supply, the main reason was also affected by the climate but in 2018, both the volume and value of exports increased although many businesses had a crop transformation According to the Institute of Agricultural Science for Southern Vietnam, the EU is the most consuming market for our country's coffee, accounting for 40% of the total volume, 38% of the total coffee export turnover of the country, and Southeast Asia areas is the second largest consumption market of our country with 13% of the total coffee export volume and turnover of our country The situation of Vietnam's coffee exports in 2019 decreased sharply, mainly due to the export price and especially the focus on the export price of Robusta coffee - coffee accounts for about 74% of the total coffee export volume of the country According to information from Vietnambiz, accumulated coffee exports in 2019 decreased 15.2% in volume, and 22.4% in value compared to the previous year The coffee market report for 2020 is still being updated and there is no explicit datasheet According to statistics in the first three months of 2020, the volume and value of coffee exports reached 474 thousand tons and 801 million USD, compared to the same period last year, this figure decreased by 3% in volume and 5.6% in value In the Polish market, the cumulative export value of Vietnam coffee reached 12.31 million USD, up 77.3% while in the UK market it plummeted by 50.8% and reached 13.55 million USD The data shows overall factors for Vietnam's coffee exports: volume, value, average export price and largest coffee consumption markets in Vietnam in the first months of 2020 The special feature of this chart is that it shows us the data as well as the variatio: between the same time period in previous years Figure 2.1.1 The Coffee Export Situation In Vietnam 5T (the first months) of 2020 Source: ICO, General Department of Customs, Vietdata complied If the first quarter had an uneven increase or decrease, in the second quarter, in general, the coffee export volume and value increased Specifically, Robusta coffee volume increased 4.9% and value increased 1.9%, so this period coffee reached 694.6 thousand tons with a value of $ 1,029 billion Regarding the type of export, Robusta is still the most popular type of foreign enterprises in Germany, Thailand, Australia and also less popular in the US, UK and France It is also due to COVID-19 that global trade supply chains are affected, making it difficult to transport between importing and exporting goods between Vietnam and overseas 2.1.2 The main types of Vietnam coffee Our country is an extremely diverse country in terms of types of coffee, not only that, each type of coffee is sometimes selected and divided by businesses based on the income level of each customer group However, at present, in Vietnam, we only export main types: Robusta, Arabica, and Excelsa, of which Robusta is the most popular type of coffee by many importers Robusta is the second most important coffee grown in Vietnam, it can be said that it accounts for about 74% of the country's total coffee exports Although accounting for the majority of that, in general, in the first months of 2020, Robusta coffee exports still decrease Specifically, according to the latest statistics from the General Department of Customs, Robusta coffee exports reached 983 thousand tons with a value of 1.46 billion USD, down 2.4% in volume and 4.6% in value compared to 2019 Table 2.1.2 also shows that Arabica and Excelsa only export in small quantities, this proves that maybe by 2020 all goods are at a disadvantage but have the opportunity such as Robusta coffee, there is still a lot of hope in the years to come Table 2.1.2 Types of coffee exports in August and the first months of 2020 Source: General Department of Customs 2.1.3 Price export coffee a/ Coffee price export in recent years: Vietnam coffee export prices always fluctuate According to the original plan, it was estimated in 2020, the value of the quantity increased to 2.2%, and the value increased by 1.3% with a total of 941 thousand tons at the price of 1.59 billion USD However, most recently, we have data on coffee export prices in the first 10 months of 2020: generally the country exported over 1.15 million tons of coffee with a turnover of 1.97 billion USD, the average export price is 1,711 USD/ton Thus, it decreased by over 2% in both volume and turnover but increased slightly by 0.1% in price over the same period last year Besides, countries such as Germany, America, Italy, Spain, Japan are markets with an import volume of over 50,000 tons of coffee in our country Due to the influence of world markets, Vietnam's coffee prices have been continuously reduced Although Vietnam is a coffee exporter, in fact, Vietnam is a country with low export prices Under the impact of price fluctuations, the coffee industry in Vietnam is facing many challenges as well as the balance between supply and demand Table 2.1.3 shows the details of export prices by coffee varieties Price of Robusta coffee of Vietnam in July 2019 was 188,857 USD / ton, down 15.2% in volume and 22.7% in value In which the average export price of coffee in the first seven months of 2020 is 1,516 USD / ton, down 9% compared to July 2019 As for the export price of Arabica coffee, it is pegged at 5,091 USD / ton, down 1.9% compared to February 2019 and down 2.8% from January 2019 Table 2.1.3 Export coffee prices of Vietnam in July and the first months of 2019 Kind July 2019 Quantity (Ton) Robusta Arabica Processes Coffee Excelsa Coffee 124.262 2.534 2.490 442 (Source: Import and Export Department) The state implementation of social isolation during the complicated COVID-19 epidemic, although this does not affect coffee production much, experts still say it will affect prices and export of Vietnam They forecast coffee prices will return to normal and are on the momentum of gradual recovery Besides, in the crop year 2019 - 2020, the price is estimated to be about 169.34 million bags, so the price increase will be a direct impact on both supply and demand b/ Some competitors With the special attraction and great potential of the coffee industry, there are many businesses investing in the industry today Not only foreign businesses but also domestic enterprises are increasingly trying to bring their brands to the world, they also cooperate with each other for mutual benefits but competitiveness accounts for a lot because everyone wants to take all the benefits Most businesses 11 compete on production output, human resources, and invest to apply modern machines to the production - processing chain Most recently, the Ministry of Industry and Trade has approved and published a list of 268 reputable exporters in 2019, including 11 coffee exporters (see table 2.1.3) These are all brands with extensive experience and cooperation with many countries, we can see the highest top list is Intimex Joint Stock Company and the last one is Minh Tien coffee Import-Export Company Limited Of course, every business has different pros and cons, we can not but admit that the competition helps the economy develop strongly Table 2.1.3 The reputable coffee exporters of Vietnam in 2019 No Company Name Intimex Joint Stock Company Mascopex Joint Stock Company Daklak September 2nd Import-Export Company Limited Tin Nghia Corporation Joint Stock Company Phuc Sinh Joint Stock Company Vinh Hiep Co Ltd Intimex Dak Nong Joint Stock Company 10 Dakman Vietnam Co Ltd Agrexport Joint Stock Company Hoa Trang Import-Export Company Limited 11 Minh Tien coffee Import-Export Company Limited Selected Unit Ho Chi Minh City Department of Industry and Trade Vietnam Coffee - Cocoa Association (VICOFA) Department of Industry and Trade of Dak Lak province Department of Industry and Trade of Dong Nai province Vietnam Coffee - Cocoa Association (VICOFA) Vietnam Coffee Cocoa Association (VICOFA) and Department of Industry and Trade of Gia Lai province Department of Industry and Trade of Dak Nong province Vietnam Coffee - Cocoa Association (VICOFA) Vietnam Coffee - Cocoa Association (VICOFA) Department of Industry and Trade of Gia Lai province Vietnam Coffee - Cocoa Association (VICOFA) Photo by: Sunflowers team Source: www.moit.gov.vn Besides the enterprises recognized as "the most prestigious export in 2019", we also have businesses that still have a position in the hearts of many foreign traders/businesses, we can mention a few companies as: Trung Nguyen Coffee Group: carries in itself the quality brand name with the top export quantity in Vietnam and is refined by the quintessential substances from the land of Buon Ma Thuot, with the sunny and windy highland terrain favorable for growing coffee The coffee is covered with long-established and pristine coffee beans, bringing outstanding quality with bold Vietnamese flavor Trung Nguyen has a unique flavor formula combining the uniqueness and the 12 oriental know-how that makes it impossible for customers to confuse it with another brand In order to assert its position in the international arena, so far Trung Nguyen has exported its products to more than 80 countries, G7 instant coffee is the one that importers love the most, in addition, they are also selected "try before you trust" is a diplomatic ambassador to connect Vietnamese culture with the world Vinacafe Bien Hoa Joint Stock Company: With the slogan "Vietnam Coffee, for Vietnamese", their businesses have researched and produced to develop and create their own brand As a result, they have been successful in both instant and roasted coffee It is a breakthrough in the Vietnamese coffee market to create their own character and many people also love this brand Vinacafe is also considered to be the oldest growing enterprise in the history of Vietnam's coffee industry, so far they have had a favorable first step and have a strong foothold thanks to the delicious taste and satisfying demand of domestic and foreign consumers An Thai Coffee Group: This is also one of the "competitors" of Vietnamese coffee exporters, with more than 20 years of experience in the field of production and development based on the slogan "Green Development - Strong growth “ An Thai Coffee received a series of certificates and awards for outstanding coffee quality, absolute assurance and received the trust of domestic and foreign customers An Thai coffee products have been well received by other countries and present in many international markets and affirmed their position in the international areas 2.2 The general process of exporting goods Except for businesses with long-term experience, a thorough information search is essential for new businesses In the import and export stage, there are many means of transport such as land, sea, air, However, goods going by sea are more common, so here are steps to Export of goods by sea which we would like to discuss with you: Figure 2.2 The general export (designed by Sunflowers team) Source: www.container-transportation.com/quy-trinh-lam-hang-xuat 13 For commercial coffee export contracts, the difficulty is not what the step-by-step process what needs to be done because experienced firms can understand easily However, the thing to notice we want to mention is the quarantine issue and quarantine requirements of importing partners In fact, there have been a lot of disputes occurred because of violation of the quality clause on goods of plant and animal origin such as coffee, wood, and even the Phytosanitary/Veterinary certificate is not qualified Although sometimes the reason is not is a deliberate violation of the exporter, which could be due to changes in temperature or humidity during transportation between countries make insects to grow or by quarantine method between two different countries Therefore, enterprises need to pay close attention as well as exchange in commercial contracts about these issues to minimize time-consuming, moneyconsuming disputes and the mutual relationship between both importers and exporters Vietnam is a signatory to cooperation agreements on plant protection and quarantine with the following countries: Cuba, Russia, Mongolia, Chile, Romania, China, Belarus, Uzbekistan, Kazakhstan So, if you export coffee to these countries, you need to quarantine for the shipment Currently, administrative procedures include customs clearance, registration, and inspection procedures Any import-export contract must fully meet the requirements of administrative procedures and through departments according to the regulations of the state The import and export administrative procedures must ensure factors: Complete import and export dossiers according to regulations of the customs department and customs clearance procedures for commercial imports and exports Therefore, understanding Vietnamese administrative procedures will help the company implement customs procedures quickly and fully and is an essential basis for the company to clear goods on time to minimize risks and a tax refund on contract terms with the partner 2.3 Some documents in the coffee export trade contract In the Practice of International Trade subject, we have researched the documents export-import in the international commercial contract, which is a series of the necessary documents to complete in export/import for a batch of goods Specifically in this report, we will research the documents for exporters' parties and especially the documents in the contract of the export coffee in Vietnam The export businesses have to prepare carefully the documents in below: Commercial Invoice: this is a legal document that the seller supplies for the buyer, we can say this is one of the necessary documents in the international commercial contracts and shipping by the sea Sale contract: a document shows the purchase and sale cooperation agreement between two parties, in which specific provisions on compulsory terms following term No.50 of The Law Commercial and optional terms but encourage apply is Incoterms Packing List: the way of packing the goods will be clearly shown through this document 14 Bill of Lading: when the goods are loaded onto a means of transport such as a ship or an airplane, this kind of document will confirm for that job, this kind of paper is signed by the master Phytosanitary certificate: in order to prevent the spread of disease into the importing country, this document will be issued and certified by the quarantine body for the exported consignment Certificate of Origin: This is an important document showing the nationality of where the goods are and whether it is obtained, produced, manufactured or wholly processed in a particular country Customs Declaration: another type of document needed to declare exported goods to the customs office to see if this shipment is eligible for import into another country or not Why we need to know information about the types of documents in commercial contracts? Except for businesses that have a lot of experience in exporting, small and medium enterprises, or just starting a business, it is extremely necessary to find out information carefully to save time and problems if any Shortages occur in the process of goods being exported to other countries 2.4 Government policies 2.4.1 Free trade agreements When businesses between countries want to expand their brands through economic and commercial relations to enjoy certain incentives or promote economic development, the fact that these countries negotiate with each other to have Being able to sign trade agreements is extremely necessary and is quite important for each participating country So what is a trade agreement? This is a diplomatic document between two or more states to negotiate and sign the conditions for engaging in commercial activities As we all know, in 2020, due to the COVID-19 epidemic outbreak in the world, this has been affecting quite a lot of import and export activities of our country However, because participating in trade agreements, besides the challenges, we have received many good opportunities for the industry in general and the coffee industry in particular So what are the trade agreements for this coffee industry? We will learn through the presentation below: a/ EVFTA - Free Trade Agreement Vietnam – EU This is a new generation of a free trade agreement between our country and 27 member countries in the European Union - EU Up to now, this is one of the two FTAs with the widest scope and highest level of commitment As for the coffee industry, we can see that joining this trade agreement helps our country's businesses to expand their consumer markets, have certain tax incentives, and potential to attract capital Foreign investment is very high Although the opportunity is so, besides that, we also face a few challenges that businesses need to increase competitiveness and value of coffee by improving in terms of technology and energy absorption modern governance force 15 According to the Lao Dong newspaper, on September 16, 2020, Vietnam officially had the first shipment with a weight of 296 tons exported from Vinh Hiep Co., Ltd to the European market under the EVFTA agreement This is definitely a good start for Vietnam's coffee industry b/ CPTPP - Comprehensive and Progressive Agreement for Trans Pacific Partnership This is a free trade agreement between Vietnam and 10 other countries When participating in the CPTPP, Vietnamese businesses will enjoy a very preferential tariff reduction commitment when exporting goods to member countries According to the World Bank, our country's exports to the countries in the CPTPP are forecasted to account for 25% of the total by 2030, expected to increase from 50 billion to 80 billion USD According to a presentation on the European - American market, with 11 member countries in this CPTPP agreement, we will have more opportunities to boost exports of some potential products while the global economy market is showing signs of decline In recent years, the trade relationship between our country and other countries has been really good, and we have four countries are Canada, Chile, Peru and Mexico, all committed to cut the tax rate as soon as this free agreement comes into effect, especially in coffee exports, Peru and Chile have committed to a tax rate of 0% for Vietnam c/ RCEP - Regional Comprehensive Economic Partnership Agreement With a huge market of 24.8 trillion USD and more than 2.3 billion people including 16 member countries, of which 10 countries of ASEAN and countries have joined, because RCEP is expected much and is considered as the largest FTA in the world When joining this agreement, countries will receive a tax reduction of about 9000 types of goods and 65% of goods, this is certainly a perfect chance for coffee businesses and others commodities Currently, the RCEP agreement is still trying to sign by the end of 2020, people are still looking forward to this happening in the difficult circumstances of this COVID-19 pandemic 2.4.2 Impacts of the state to support farmers/export businesses As you all know, our country's coffee prices have recently decreased, so the government also has many measures to overcome these situations: even though the coffee price has decreased makes many people worry, the government still advises people to grow coffee, but they must plan the correct coffee growing area and not continue deforestation of the natural forest to grow coffee In addition, the government also provides capital so that coffee growers can further improve the quality of replanting The State Bank, the Ministry of Agriculture and Rural Development have jointly deployed coffee replanting with a planned capital up to 12,000 billion VND and only for provinces of the Central Highlands However, due to unsolved problems related to state policies and the fear of change among our farmers, this is still difficult, expected to take 5-7 years 16 The government still encourages people, especially businesses that should use factories with a variety of machine technology to increase their competitiveness with other countries as well as create new things which only can we it in the Vietnamese market 2.5 SWOT 2.5.1 Strengths Advantages of Vietnam is that it has a climate suitable for coffee growing and thanks to good natural conditions, fertile soil and large cultivated area, coffee trees have enough conditions to grow well and prevent them from growing many types of pests and diseases Abundant labor force, cheap labor cost and maintaining its position as the 2nd coffee exporter in the world with high export volume The State is always interested in helping farmers and has improved policies for businesses, farmers to facilitate coffee production / processing / export, in addition a few large enterprises have investment capital Foreign investors have also invested in European-standard machinery and equipment for their companies 2.5.2 Weakness Vietnamese coffee is mainly exported in the form of raw coffee or green coffee that has not been intensely processed as foreign competitors Therefore, many Vietnamese coffee brands are still unclear and not widely known by foreign consumers, in other words, marketing issues - the strategy to build and develop coffee brands effective In addition, the production and processing stage still limits the use of high-tech science and technology applications, although many coffee exporters, enterprises applying modern machines are still limited and have quite a few sources good human resources to manage In addition, many farming households have many difficulties with crops due to nature, commodity prices also decrease slightly due to the impact of the COVID-19 epidemic, which brings worry and damage to exporting enterprises import of Vietnam 2.5.3 Opportunities Compared to the world coffee export market, although Vietnam is currently facing many difficulties after the COVID-19 epidemic, if we look at another angle, our country still has many opportunities to develop With many advantages from nature conditions in concentrated areas, the area of cultivated land also increases and human resources are hard-working and enthusiastic at work In addition, some companies have successfully applied European-standard equipment to increase production and value for products, and free trade agreements have also been signed to help transport goods between countries that can cut or reduce the tax Besides that, Vietnam's coffee consumption market is increasing, it is really a chance for to Vietnam export a huge coffee production to many countries Our country is also more and more foreign traders who come to cooperate to export coffee to their countries or have goodwill to invest in capital to upgrading Vietnamese brand coffee production and processing machinery chains 17 2.5.4 Threats There are always difficult challenges to overcome at present: the uncontrolled change from the COVID-19 epidemic caused coffee export prices to fall continuously, fierce competition between domestic and foreign businesses, and sometimes unfavorable natural conditions makes many farmers have to switch to other crops Next, although the participation in free trade agreements is an opportunity for our country's coffee exports to develop, exporters are forced to innovate in technology to increase their competitiveness and value of coffee, this sounds simple but it also a lot of difficulties for businesses because they are familiar with old methods, afraid to innovate and are afraid of not keeping up with the speed of growth of technology 4.0 Another factor, in Vietnam we have ample resources and the salary paid by businesses is cheap, the weakness of this is that it will make our product despite having enough development conditions However, the development can still be slow, so besides investing in modern machines, they should also organize the training of a good human resource Photo by: kenh14.vn 18 Chapter 3: Solutions to boots Vietnam’s coffee to overseas Vietnamese coffee is one of Vietnam's main agricultural exports, although there are many opportunities and help from the government as well as foreign businesses but in the long term, we think we should still find solutions to save ourselves How to do? Here are some solutions that we can read to and apply in life: a/ Solutions to promote export of the coffee industry: In terms of production, businesses need to promote the restructuring of the coffee industry effectively, such as building concentrated and specialized growing areas associated with the development of the processing industry, promoting the linkage of raw material areas with deep processing facilities and factories to create a stable source of goods in quality and quantity Since Vietnamese enterprises have so far only exported raw coffee, investing in machines in deep processing will help our country's businesses bring their brands to the world At the same time, our country's businesses should also supplement knowledge about machines using artificial intelligence to find out customers' needs, we should also find and train good human resources with expertise and foreign Good language for them to have a suitable development strategy and to help businesses develop and expand markets in other countries, this is called trade promotion In addition to the competition, in a certain aspect, businesses also need to strengthen links, cooperation in coffee production, and business together in the spirit of mutual benefit to stabilize the export situation expand the market as well as accumulate more experience in the future b/ Solutions to boost the value of coffee exports: There is a question that is: coffee production is facing the situation of "high output, low price", so how to increase the value of coffee exports soon? This is not a simple problem but we can fix it and improve it Coffee in our country is a commodity with a large turnover but low value compared to other countries, accounting for only 14.2% of the global export market The urgent problem is that we need to research and come up with suitable solutions Businesses can also produce - process a variety of products and tend to meet the current customer needs to meet the requirements of clean, organic products, beneficial for health and environmental protection school If businesses can this along with promoting communication and branding, they will surely be known by foreign businesses Also according to Dr Manuel Diaz P - a coffee consultant from Mexico also advised our country's businesses that we need to create a more specific and stricter standard in the production stage, find out how Improving production/quality is based on science and technology, not based on fertilizers 19 Conclusion To sum up, the coffee market is changing in a positive direction, gradually expanding, orienting its development, and focusing on quality to meet market demand One of the factors of market development is the perception of reasonable buying and selling - an increase in prices drives net exports to increase and to increase export contracts Thanks to exports, Vietnam is able to expand cooperation relationships and promote external relations so that the economy can be integrated with the EU so that the economy can be developed and export brings an important factor to the economy many aspects Vietnam is a developing country in terms of export markets, in which coffee is the main industry contributing a lot of GDP to the country From these problems, we show the export situation in Vietnam to the international market, and take that as the driving force for more development and offer solutions to solve problems In chapter one, we have an overview of the coffee-making process and export activities In addition, we also understand more about the quantity and consumption markets, from which we learn about domestic coffee export enterprises and have a general perspective on Vietnam's coffee export market Also in this chapter, the theoretical basis is given to help us to understand the basics of export and is a prerequisite for development in the following points After a more general understanding of the coffee market, we will go to analysis with specific data with chapter two To better understand issues related to export, especially Vietnamese coffee, the Sunflowers group presented the main contents such as production - export situation, popular coffee varieties in the market as well as the fluctuation in export prices In this chapter, we also discuss more the countries that import Vietnamese coffee, about the needs and tastes of consumers In addition, we also offer a few reputable businesses as well as their competition in today's growing environment Next, we have outlined the general export process, the considerations in the coffee export process, and government policies as well as the effects of free trade agreements on coffee export Through that, we use the SWOT method to summarize and re-evaluate the strengths, weaknesses, opportunities, and challenges of the coffee industry Finally, in chapter three, we have come up with a few solutions to promote the coffee industry and solutions to enhance the value of coffee to bring Vietnamese coffee to the world market These measures have been refined by domestic and foreign consultants, so I highly recommend you to read this section if you are incubating a coffee import-export business in the future 20 Hopefully, this report will help you get a better overview of the Vietnamese coffee market, especially in terms of exports This is extremely useful information for you in your future career, so please read it carefully Conferences 1/ Bộ Công Thương – báo cáo Xuất Nhập Khẩu Việt Nam năm 2019 2/ Vietnambiz – báo cáo thị trường cà phê năm 2019 – 2020 3/ CoffeeRoastersVietnam – thống kê xuất cà phê Việt Nam năm gần 4/ Tạp chí Cơng Thương – báo cáo giá xuất cà phê năm 2020 5/ Vinanet – tình hình xuất cà phê Robusta 6/ Báo Đắk Lắk – ngành cà phê trước hội thách thức 7/ Tin tức Pháp Luật – RCEP-FTA lớn giới chuẩn bị ký kết Hà Nội 8/ Trung tâm WTO – xuất cà phê tận dụng hội từ EVFTA 9/ Trung tâm WTO – tăng xuất năm đầu thực thi CPTPP 10/ Melody Logistic – thủ tục xuất cà phê 11/ CafeF – tin tức tổng quan liệu xuất cà phê And statistic articles from General Department of Customs, Ministry of Import and Export 21 ... Recently the CocaCola market just entered the Georgia Coffee Max instant coffee market, the price of a can of coffee is equal to a can of iced coffee on the sidewalk and they think that the goal... sharply, mainly due to the export price and especially the focus on the export price of Robusta coffee - coffee accounts for about 74% of the total coffee export volume of the country According... Chapter 2: The actual situation and the process of exporting coffee from Vietnam to other countries: Analysis and Evaluation 2.1 The situation of coffee Exports Vietnam 2.1.1 The situation of coffee