The author applies several methods including information collecting, processing, analyzing, comparing, contrasting, predicting, synthesizing. Tables, figures, charts, etc are also included in the thesis to perform and analyze the data to figure out trends and fluctuating characteristics of the research subject. The author uses the logical method which is based on a theoretical basis, to analyze data about the current situation of coffee exports from Vietnam to China so as to provide particular evaluations and recommendations
Rationale of research
Productivity can be increased by the emphasis on exports which helps concentrate investment in the more efficient sectors of the economy (Emery, 1967) Profitable export sectors attract additional investment, a greater flow of new technology and managerial skills, and increasing demand (Osano, 2016) In recent years, the Vietnamese government has been giving export special attention intending to further promote industrialization and modernization of the country and integrate into the regional and world economy Coffee exports are one of the top priorities and China is a potential market to promote coffee exports.
On the one hand, the coffee business is occupying an important position worldwide Especially in Vietnam, coffee is the major export commodity,second only to rice Every year in the country, the flourishing of coffee exports benefits the country in many ways It contributes about 3% to the GDP of the country annually and about 15% of the total export of agricultural products in the period 2011-2018 Coffee exports also contribute to economic restructuring to promote production; It has a positive impact on creating jobs and improving people’s lives by attracting millions of laborers to work and earn high and regular incomes; is the basis for expanding and promoting our country’s foreign economic relations In today’s trend of opening up and integrating into the world economy, Vietnamese coffee is expanding with remarkable achievements Vietnam’s coffee exports rank second, only after Brazil, in the list of the world’s largest coffee export volumes Moreover, Vietnamese coffee brands, Trung Nguyen or Vinacafe for instance, are growing their positions in the international market Vietnam nowadays is well-known as a powerhouse of coffee exports and the quality of Vietnamese coffee, especially Robusta, is much improving
On the other hand, China is one of the closest and major trading partners of Vietnam China is the second-largest economy in the world after the United States, with a population of over 1.4 billion people The young population makes up most of the population structure Chinese young people and other social classes are gaining more interest in coffee and consider coffee to be as important as their traditional tea Vietnam has a common border of over
1300 km and many trade border gates to China, Mong Cai - Quang Ninh international border gate for example China supports cross-border trade with Vietnam and has issued many preferential policies under the ASEAN-China Free Trade Agreement (ACFTA) China is also not a demanding market for imported agricultural products Despite certain achievements,Vietnam’s coffee exports to China still meet difficulties in many aspects.Being aware that studying and researching Vietnam’s coffee exports toChina is vital, the selected topic is: “Vietnam’s coffee exports to China in the period 2016-2021: Advantages and Challenges” to learn about achievements and limitations in exporting Vietnamese coffee to China to make evaluations and propose some recommendations.
Previous researches
At the national level, documentary information about the coffee industry is mainly on analytical articles or statistical websites such as VICOFA (Vietnam Coffee and Cocoa Association) At the worldwide level, documents and figures about the coffee industry are listed on the website of the World Trade Organization (WTO), the World Coffee Organization (ICO) There are several research projects and dissertations on coffee, but most of them are about economic efficiency and development potential; a number of researches about the coffee market in China For example, Coffee market in China explained Chinese coffee consumer trends and provide some suggestions for firms and retailers to get achievements in the long run; a number of researches about Vietnam - China trading relationship For instance, Vietnam-China agricultural trade pointed out several advantages and challenges of the trade relationship between the two countries focusing on the agricultural fields.
However, those aforementioned are only the most general information about Vietnam's coffee industry, the world coffee industry, exporting agricultural products from Vietnam to China in general, or analysts with old data Therefore, my thesis focuses on analyzing the situation of Vietnamese coffee exports to the Chinese market in the period 2016-2021.
Objectives of research
This thesis studies the current situation of Vietnam’s coffee exports to theChinese market in the 2016-2021 period, from which to evaluate advantages and disadvantages and propose recommendations based on the assessment.
Subjects and scope of research
The objective of the thesis is the coffee export activity of Vietnam to the Chinese market.
Scope of research is as the following:
- Space: Coffee exports from Vietnam to China.
- Time: the current situation of Vietnam’s coffee exports to China in the 2016 - 2021 period.
Research methodology
The author applies several methods including information collecting, processing, analyzing, comparing, contrasting, predicting, synthesizing. Tables, figures, charts, etc are also included in the thesis to perform and analyze the data to figure out trends and fluctuating characteristics of the research subject
The author uses the logical method which is based on a theoretical basis, to analyze data about the current situation of coffee exports from Vietnam toChina so as to provide particular evaluations and recommendations.
Structure of research
To achieve the research purpose, in addition to the table of contents, the list of acronyms, the list of tables, and the list of references, the thesis contains
3 chapters: The first chapter is “Overview of Vietnam’s coffee exports toChina” where the author provides general information about Vietnam’s coffee exports and the Chinese market The second chapter is “The current situation of Vietnam’s coffee exports to China in the period 2016 - 2021”.
In this chapter, the information and data about export volume, export turnover, price, etc, and assessments of advantages and limitations due to which are presented Finally, the third chapter proposes some recommendations due to evaluations in the last chapter.
Overview of export
Export, in general, is known as the sale of goods and services from one country to another based on using currency as a payment method In the former mercantilism, the payment method was not money, but also gold, silver, precious stones… In the modern economic context, money is the main method, and it is possible to use the currency of either party or the currency of a third country.
In Article 28, Clause 1 of Vietnam’s 2005 Commercial Law, it is stated that
“Export of goods is the act of bringing goods out of Vietnam’s territory or into a special area within the territory of Vietnam, which is considered an economic zone separate customs area as prescribed by law” Thus,according to the law of Vietnam, export is basically the sale of goods to foreign countries, to countries other than Vietnam.
In Vietnam, there are four main forms of export
Direct export is a popular form of export today The seller and the buyer are based on direct transactions, agreements, and negotiations on the interests of each party under the law of each country taking part in the transaction and then conclude the final contract This shows the autonomy of enterprises in trading goods, finding market partners on the basis of market research and consumer tastes in the target country However, the enterprise will be the unit that directly conducts the business and is responsible for transaction procedures, costs incurred, profits earned, and losses when doing business
Entrusted export exists with two main subjects including the domestic enterprise and the market (the export-oriented nation), plus an intermediary enterprise operating in foreign countries This form is applied when domestic enterprises encounter barriers in terms of financial ability, partners, or language In that case, they will negotiate and entrust intermediary enterprises to export goods After receiving the entrustment, the intermediary enterprise will undertake all export procedures of the domestic enterprise, the costs incurred, commissions, and the right to receive after the entrustment, which is stated in the contract between the two parties.
On-spot export is the form of exporting goods produced by a domestic enterprise, which sells to foreign traders or enterprises, but delivers all the goods received to another designated domestic enterprise According toArticle 86, Circular No 38/2015/TT-BTC on “Customs procedures for on- spot exported and imported goods”, there are three main types of on-spot exported goods.
The first is handmade products; leased or borrowed machinery and equipment; surplus raw materials and supplies; scrap and discarded products under the processing contract as prescribed in Clause 3, Article 32, Decree 187/2013/ND-CP Second is goods traded between domestic enterprises and export processing enterprises, enterprises in non-tariff zones Third is goods traded between Vietnamese enterprises and foreign individuals and organizations that do not have a presence in Vietnam and are designated by the trader to deliver and receive goods with other enterprises in Vietnam.
Temporary import and re-export is a form in which Vietnamese traders temporarily import goods and services of a domestic production and business enterprise Then they use the same goods to export to other countries outside the territory of Vietnam This form has both import and export processes, thus the amount of foreign currency revenue will be larger than the initial capital spent.
1.1.3.1 An important driver of economic growth
Export of goods and services is an international activity, taking place for all subjects in the market and under the control of the Government The purpose of exporting is to bring their goods and services to other countries in the world From that business will help the subjects earn more foreign currency For a socialist country, with a developing economy like Vietnam,the open strategy of the economy through export plays an important role.Because when exporting, it is possible to earn a lot of foreign currency,have access to scientific and technological innovation, and science and technology transfer Besides, the opening of the economy also helps the country gain business lessons Experience from developed countries combined with government policies to improve the economy is likely to increase economic growth, and narrow the gap with developed countries.
1.1.3.2 An opportunity to improve the quality of Vietnamese products and goods
Exporting is not simply being able to export goods and services to a country other than Vietnam In fact, goods that are cleared by Customs and consumed in other countries must undergo a rigorous inspection to ensure quality standards in the exporting country It requires a serious and thorough investment, applying new production and business methods, and innovating equipment and production technology to further improve product quality This not only helps export goods and services have a more convenient way to enter the country’s economic market share but also affirms the important position of high-quality Vietnamese goods and products.
1.1.3.3 A driving force for economic restructuring
One of the main export roles is the premise for the Vietnamese economy to move in a more appropriate direction Indeed, in the context of an open economy, the Government focuses much on exports, especially on key export industries such as rice, cashew nuts, textiles, seafood, etc Along with that, it also entails the development of a supply chain from raw material production to processing This helps economic entities to have more access to automated production methods and chain-specific production models As a result, the country’s structure changed more quickly.
1.1.3.4 A factor creating jobs and improving people’s living standards
The promotion of exports requires goods and products to be made in large quantities, raising a problem of labor supply for enterprises and the
Government In the context that our country is a country with a young population, exporting is an opportunity to help workers find jobs suitable for each skill level Workers will earn a higher income and have a higher standard of living.
1.1.3.5 A premise to expand and promote foreign economic relations
Exports and external economic relations have a two-way relationship In fact, exporting goods and services to a country will help Vietnam have more trade relationships in the international market, and simultaneously enhance the role and stature of the country On the other hand, external economic relations with other countries are the premise to help Vietnam understand the market for export consideration Other countries will also have a more intuitive view of Vietnamese goods and then consider importing goods from Vietnam Therefore, it can be said that exports are the driving force behind Vietnam’s foreign relations with partners all over the world.
Overall, exports play an important role in the national economy, promoting economic restructuring to participation in socio-political issues Exporting is also the process that helps our country promote the stature of Vietnamese goods as well as shortens the economic gap and disparity with other countries.
Overview of Vietnam’s coffee export to China
1.2.1 Overview of Vietnamese coffee product
Coffee is a black beverage that contains caffeine and is produced from roasted whole beans Currently, coffee trees are grown in more than 50 countries and are popular in most countries around the world.
Arabica coffee is the first coffee introduced to Vietnam in 1857, through several French missionary priests It was initially planted at Catholic churches in some provinces in the North, such as Ha Nam and Phu Ly, later in Thanh Hoa, Nghe An, and Ha Tinh provinces After that, the coffee was spread to the Central area such as Quang Tri and Quang Binh After the war, coffee gardens here continue to be maintained Therefore, this area has a very high distribution rate of coffee When the coffee trees came into the South of Tay Nguyen and Southeast area, people realized that here was the most suitable place to grow coffee.
In 1908, the French imported two more varieties of coffee into Vietnam, Robusta, and Liberica After a while, Western colonists saw that Arabica coffee did not bring high economic efficiency They brought the coffee from Congo to plant in Tay Nguyen This area has become the largest coffee-growing one in Vietnam, both in terms of scale and reputation. Nowhere in Vietnam has coffee become famous like in Buon Ma Thuot.
There are thee main coffee varieties in Vietnam: Arabica coffee, both Robusta coffee, and Liberica/Excelsa coffee.
This is the coffee with the highest economic value among the coffee tree species Arabica accounts for 61% of coffee products worldwide InVietnam, Arabica only accounts for about 5% of the total area and 8% of the total coffee output, scattered in the northern mountainous provinces such as Lai Chau, Son La, Yen Bai; in Central provinces such as ThanhHoa, Quang Tri, Quang Nam, and a part in Lam Dong province.Worldwide, Arabica is grown throughout Latin America, Central and EastAfrica, India, and parts of Indonesia Arabica coffee is also called Brazilian
Milds if it comes from Brazil, Colombian Milds if it comes from Colombia, and Other Milds if it comes from other countries Brazil and Colombia are the two main exporting countries of this coffee, the quality of their coffee are well-known Other major exporting countries include Ethiopia, Mexico, Guatemala, Honduras, Peru, and India.
In the market, Arabica coffee is more valuable than Robusta coffee because of its delicious taste and less caffeine content A whole bag of Arabica coffee (60 kg) usually costs twice as much as that of Robusta coffee. Vietnam is the second-largest coffee exporter in the world, but mainly Robusta coffee It is difficult for Vietnam to cultivate this coffee because the altitude is not suitable Besides, the Arabica coffee plant suffers much from pests and diseases, so compared to Robusta, it is not very economical.
Robusta is Vietnam’s crucial coffee tree, accounting for 95% of the cultivated area, mainly grown in Tay Nguyen and some Southeast provinces such as Dong Nai, Binh Phuoc, Ba Ria - Vung Tau Around the world, Robusta is grown in West and Central Africa, Southeast Asia, and a small part of Brazil The largest coffee exporter in the world is Vietnam Other important exporting countries include Côte d’Ivoire, Uganda, Brazil, India
Robusta coffee contains higher caffeine content and has an impure taste than Arabica coffee, so it is less valuable The price of a whole bag of Robusta is usually only half that of Arabica.
In Vietnam, Liberica is grown mainly in provinces such as Nghe An, GiaLai, and Kon Tum, which have favorable conditions for developing industrial crops but not favorable for developing coffee This is also the reason Dak Lak and especially Buon Ma Thuot is considered the capital of coffee, but there are few areas to grow this type of coffee In Tay Nguyen, Liberica coffee is often harvested later than other coffee species because it blooms thanks to rainwater The fruit is harvested in the 12th lunar month, after other coffee species Sometimes, Liberica planted in rows with a distance of 5-7m per tree can be used as a windbreak for Robusta coffee.
Worldwide, Liberica is grown in Malaysia and West Africa, but because of its unpopular taste, only a tiny amount is traded in the world.
1.2.1.3 Features of coffee production and business
First, the coffee tree is seasonal, which has a great influence on the coffee business This feature affects even big coffee producers and traders such as Brazil and Colombia During the harvest season, the price of ratification is low, and at other times it increases significantly because of the scarcity of goods It is for this reason that coffee exporting countries and coffee export businesses will gain advantages when they have enough finance to stock up on coffee.
Second, the coffee tree is a long-term industrial plant, taking about 3-5 years until harvest season It is this problem that affects producers, especially those with limited financial resources, who have to borrow capital from banks to invest in growing coffee When the coffee market changes, it is difficult for them to seize the opportunity right away Thus, there is a high requirement for farmers to know how to research and forecast the general trend in order to make profitable investments.
Third, weather conditions heavily influenced coffee production In years of drought and flood, the coffee crop failed, affecting the exported coffee,thereby indirectly affecting the world’s coffee market Predictions from experts, national-leveled plans as well as coffee export businesses can all be messed up.
Furthermore, trading in coffee has high risks, especially business forms related to future contracts, differential prices,
1.2.2.1 Overview of the Chinese coffee market
Coffee was first introduced to China in the late nineteenth century by a French missionary in Yunnan province Coffee production then waited for more than a century, until 1988 when the Chinese Government, in collaboration with the World Bank and the United Nations Development Program, began a project to regenerate the industry Big companies like Nestlé also encourage coffee to grow in the region (ICO, Coffee in China, 2014).
According to market research by Euromonitor, the Chinese coffee market is mainly composed of instant coffee Indeed, instant coffee accounts for about 99% of retail sales by volume and 98% by value, although roasted coffee is growing at a faster rate The most common types of instant coffee are 3-in-1 products that contain coffee, sugar, and whiteners, as well as flavorings.
The growing popularity of coffee shops and coffee culture has fueled the growth of the roasted coffee market Coffee shop sales are growing faster than retail sales, with the number of cafes in China estimated at 13,834 at the end of 2013 As incomes rise, consumers tend to consume more high- end products Retail sales of coffee pods are the most dynamic growth although they are still a niche product (Nguyen Hoang My Phuong, 2015).
Criteria to evaluate advantages and disadvantages of Vietnam’s coffee
Includes a system of laws affecting export activities Each country has a different legal system, so there are different regulations on export activities. For the export of coffee subject to the UK, the following factors will be enjoyed:
– Regulations on taxes, prices, types of coffee, volume of imported coffee… Vietnam currently has not received preferential treatment from theWTO, so it is still subject to high tax rates Therefore, it is difficult to reduce costs to compete with competitors.
– Regulations on employment regime, salary, bonus, welfare insurance… The coffee industry attracts a fairly large workforce, including many different subjects Therefore, it requires a diverse salary policy, depending on each object involved in each stage of coffee production for export For coffee growers, there must be specific policies on prices and protection policies to help them feel more secure in production For the staff involved in coffee export, they must have an appropriate salary regime, in addition to provide the necessary equipment for them to grasp world market information.
- Regulations on coffee export contract transactions such as: price of coffee, quantity of coffee, means of transport used in coffee export transactions
– Regulations on free trade or the construction of strict tariff barriers. Vietnam is not entitled to free trade regulations because we are not a member of this organization, moreover, Vietnam is not a member of WTO.
Thus, the legal element is important because if you do not know the regulations on the importing country, the exporting business unit will face many risks.
Different cultures also regulate the import and export of different goods. The culture of a country is formed a long time ago and has become a habit with the people of that country The export of coffee will bring our culture into the importing country If we deliberately keep the Vietnamese culture, sometimes it is an obstacle for the export to the Chinese market China highly values the origin of coffee, but in Vietnam, the production of coffee is scattered, the purchasing is concentrated from many small units and households This makes it very difficult for Vietnam to get the name of the origin of coffee products.
The purpose of export is to serve the needs of the importing country. Therefore, our coffee products are suitable for the needs of consumers of that country or not It requires us to know how to harmonize between Vietnamese culture and the culture of the importing country Sub-cultural factors are influenced by the customs and habits of each country, that country likes to drink instant coffee, or black coffee, prefers filter coffee or instant coffee Thus, we must learn to have appropriate export policy.
This factor includes economic policies, diplomatic agreements, exchange rates, etc.
– Economic policy tools of importing countries and Vietnam: Will help countries get a most suitable business environment Vietnam's policy is to develop a strong export-oriented market economy, especially with a policy of key export products for coffee, so the state has many incentives for the coffee industry This is a favorable condition for Vietnam's coffee exports.
– Factors of income, people's living standard: People's living standards are high, then the decision to buy coffee is not affected by the price change in the downward trend Low income is the opposite.
– Resource factor and natural resources
This factor affects export business enterprises Resources are large enough to be able to carry out export activities Because export activities contain many risks Each country has its own advantages in each of its products, so the production structure of countries is also different.
Vietnam has the advantage to produce export coffee Natural conditions,combined with abundant human resources and long-standing coffee production experience of Vietnamese people have created Vietnamese coffee with its own flavor and conditions to reduce export costs This is a condition to promote coffee exports.
Science and technology factors have a close relationship with economic activities in general and coffee export activities in particular Science and technology is developing day by day, making trade between partners easier and easier The space-time distance is no longer a big obstacle in import and export The development of the global information network Internet, helps to keep all world market information updated continuously and regularly. Import-export businesses can also advertise their products with very little cost.
However, in creating export goods, for coffee exporting countries like Vietnam The coffee cultivation and processing still lacks serious machinery and equipment, leading to unsatisfactory quality, unstable productivity, etc., making it difficult to export coffee.
Stable political factor is an opportunity to expand the market scope as well as the capacity of the coffee market But it also has a big barrier limiting the ability to export if the political situation is not stable.
Vietnam has relatively stable political conditions, so it is not only a good condition for coffee production, but also attractive to coffee business investors because this is a stable source of goods for them .
The competition of rivals in the international market is very strong and fierce If our country's coffee export activities want to survive and develop, a very important issue is to win over competitors in terms of price, quality, reputation, is a challenge and a big barrier for Vietnam Competitors with Vietnam in coffee not only have strength in political economy, science and technology, but today the joint venture has become large corporations, creating the strength of monopoly in the market These economic groups have great strengths and determine the market, so they are a huge obstacle for businesses in our country If export activities are not properly organized, businesses will be strangled by these corporations Therefore, Vietnamese businesses must always know how to build a strong brand name, in addition to being reasonable in price, and increasing the quality of coffee products It was a great success for Vietnam's coffee competition.
Finance: Vietnam Coffee Corporation is a large-scale state-owned enterprise with:
– The existing system of technical facilities of the enterprise:
Standards for exporting coffee to China
1 ROBUSTA DRY PROCESSED COFFEE, TYPE 1, SIEVE 18
Minimum 90% on sieve (>90% on Screen No.): 18 (7.1mm) Packing: 60kg in a full bag
2 ROBUSTA DRY PROCESSED COFFEE, TYPE 1, SIEVE 16 Humidity: 12.5% max
Rate of black and broken seeds: 2% max
Packing: 60kg in a full bag
3 DRY PROCESSED COFFEE ROBUSTA, TYPE 2, Sieve 13 Humidity: 13% max
Rate of black and broken seeds: 5% max
Packing: 60kg in a full bag
Standard export (19.2 tons/container or 21.6 tons/blown container)Wet Processed Robusta Coffee (Washed)
1 Wet PROCESSED COFFEE ROBUSTA, TYPE 1, Sieve 18 Humidity (Moisture): 12.5% max
Black & Broken (Black & Broken): 1% max
Minimum 90% on screen (>90% on screen No.): 18 (7.1mm) Packing: 60kg in a full bag
2 Wet PROCESSED COFFEE ROBUSTA, TYPE 1, Sieve 16 Humidity: 12.5% max
Broken black seed rate: 1% max
Percentage of foreign particles: 0.2 % max
Packing: 60kg in a full bag
3 Wet PROCESSED COFFEE ROBUSTA, TYPE 2, Sieve 13 Humidity: 12.5% max
Broken black seed rate: 2% max
Percentage of foreign particles: 0.5% max
Packing: 60kg in a full bag
4 ROBUSTA SPECIAL WEET PROCESSED COFFEE, TYPE 1, Sieve
Ratio of sticks and stones: 0.02% max
Minimum 90% on sieve: 18 (7.1mm), sieve 16 (6.3mm)
Packing: 60kg in sacks filled with vegetable oil
1.4.2 The principles of humidity and air ensure that coffee goes to China
About humidity: The process of storing coffee requires a moisture meter, a dehumidifier, a desiccant package, and a moisture-proof wire These devices support a lot of moisture resistance for coffee Besides, it is also important to note that the process of exporting and storing coffee for a long time can make coffee wet, so it is necessary to perform good monitoring of coffee when transporting & airing.
About the air: It is necessary to limit the amount of time coffee is exposed to the air because the longer the air is exposed, the more easily the coffee will oxidize and change the flavor Therefore, in coffee export standards, it is necessary to pack carefully, if necessary, an oxygen-deoxidation package can be used to limit oxidation It is best to use coffee packaging bags with good and effective anti-permeability In addition, businesses also need to calculate the amount of air backlog to choose the right size of oxygen absorber package.
THE CURRENT SITUATION OF VIETNAM’S COFFEE
Vietnam’s coffee exports to China in the period 2016-2021
Figure 2.1-1: Vietnam’s Export volume of coffee 2016-2021
Coffee exports in 2016 grew in most markets compared to 2015 In 2016, the coffee area across the country increased slightly (about 0.3% compared to 2015), reaching 645,400 ha Coffee production is estimated at 1.47 million tons, up 1% compared to 2015 although coffee yield decreased by
0.4% due to the impact of drought in the Central Highlands earlier this year. The remarkable point in 2016 is the high increase in the export of processed coffee products Vietnam's processed coffee exports are forecasted to increase sharply in the coming years because many domestic and foreign enterprises have been and continue to promote investment in this field For example, Nestlé has invested nearly 300 million USD and put into operation an instant coffee processing factory in Dong Nai province Domestic companies such as: Trung Nguyen, Me Trang, Vinacafe are expanding their production scale The share (of total export volume) compared to 2015 decreased (probably because) having signed an FTA with the EU, so the trend of exporting to the EU is more / the growth of the Chinese coffee industry has shown signs of slowing down after the momentum from 2007 to 2014.
Vietnam's green coffee production in 2016/2017 reached 26.7 million bags (of which 1.1 million bags of Arabica coffee) Export volume in 2017/2018 was 29.9 million, of which 1.3 million bags were Arabica coffee, an increase of about 12% compared to the 2016/2017 crop year, due to favorable weather conditions FAS maintains Vietnam's total coffee production in 2016/17, including green, roasted and instant coffee, at 27.55 million bags.
Total exports for 2017/18 were 28.15 million bags, mainly due to increasing domestic production FAS Vietnam's coffee exports in 2016/17 were 25 million bags of green coffee beans, an increase of 1.95 million bags compared to 2015/16 Green coffee exports in 2017/18 stood at 25.5 million bags due to favorable harvests.
According to preliminary statistics of the General Department of Customs, in 2019, coffee exports decreased by over 18% in both volume and value compared to the previous month, reaching 114,162 tons For 2019, exports decreased by 11.6% in volume, reaching 1.17 million tons of coffee,equivalent to 1.17 million tons of coffee.
According to preliminary statistics of the General Department of Customs, in 2020, the whole country exported 1.57 million tons of coffee, down 5.6% in volume Inventories of coffee at ports around the world have fallen to the lowest level in many years An optimistic signal shows that the coffee export market will improve in 2021 The major coffee import markets of Vietnam have all suffered great losses because of the Covid-19 epidemic and continue to implement high social distancing, increase the demand for coffee at home Along with that, information on vaccine testing will boost exports.
Vietnam's coffee exports in June 2021 reached 110 thousand tons, down 15.6% in volume and 10.1% in value compared to May 2021, compared to June 2020 decreased by 13.8% in volume In general, in the first 6 months of 2021, coffee exports are estimated at 825 thousand tons, down 12.3% in volume and 4.5% in value over the same period in 2020
According to statistics from the General Department of Customs, Robusta coffee exports in May 2021 reached approximately 111.7 thousand tons, up2.0% in volume Generally in the first 5 months of 2021, Robusta coffee exports reached 618.9 thousand tons, down 10.9% in volume and 5.8% in value over the same period in 2020 In which, exports of Robusta coffee to most of the main markets decreased, but exports to China increased With robusta coffee accounting for more than 95% of total production and an upward trend in prices over the past 12 months, coffee growers have been motivated to increase yields by increasing irrigation costs during dry periods from January to March In addition, farmers continue to intercrop coffee with other fruit trees such as avocado and durian to increase their income.
Figure 2.1-2.: Rating compare between Vietnam’s export volume of coffee to China and Global.
Figure 2.1-4: Rating comparing Vietnam’s export turnover to China and Vietnam’s export turnover.
According to statistics of the General Department of Customs, coffee exports in 2016 reached a turnover of 3.34 billion USD, up 24.7% in value compared to 2015 Thus, Vietnam's coffee exports have growth returns. Vietnam's processed coffee exports are forecasted to increase sharply in the coming years because many domestic and foreign enterprises have been and continue to promote investment in this field For example, Nestlé has invested nearly 300 million USD and put into operation an instant coffee processing factory in Dong Nai province Domestic companies such as: Trung Nguyen, Me Trang, Vinacafe expand production scale.
In 2017, coffee exports to major markets all decreased sharply compared to
2016 due to a decrease in domestic supply, except for exports to South Korea, which increased by 9.2% However, in recent months, when the coffee harvest season started, coffee exports to some markets have increased again such as exports to the EU, Russia, Algeria and the Philippines According to the General Department of Customs, in 2017 coffee exports were worth $3.2 billion, down 2.7% in value compared to
2016 Thus, in 2017, coffee exports dropped sharply due to domestic supply Vietnam decreased when affected by climate change, but thanks to high global coffee prices, coffee export turnover decreased by only 2.7% compared to 2016.
According to preliminary statistics of the General Department of Customs, in 2019, coffee exports turnover decreased equivalent to 197.14 million dollars; however, the price increased slightly by 0.6%, reaching 1,726.4 USD/ton For 2019, exports decreased by 21% in turnover and 10.7% in price compared to the same period in 2018, equivalent to 2.1 billion USD, the average price is 1,709.4 USD/ton.
According to preliminary statistics of the General Department of Customs, in 2020, the whole country exported coffee with a turnover of 2.74 billion USD, the average price of 1,751.2 USD/ton, down 4.2% in turnover but up slightly by 1.4% in price compared to 2019 Inventories of coffee at ports around the world have fallen to the lowest level in many years An optimistic signal shows that the coffee export market will improve in 2021. The major coffee import markets of Vietnam have all suffered great losses because of the Covid-19 epidemic and continue to implement high social distancing, increase the demand for coffee at home Along with that, information on vaccine testing will boost exports.
Vietnam's coffee exports in June 2021 is about 219 million USD, down 10.1% in value compared to May 2021, compared to June 2020 increased by 0.6% in value In general, in the first 6 months of 2021, coffee exports are
$1.52 billion According to statistics from the General Department of Customs, Robusta coffee exports in May 2021 reached approximately 111.7 thousand tons, worth USD 177.83 million, and 12.5% up in value compared to May 2020 Generally in the first 5 months of 2021, Robusta coffee exports reached US$969.23 million, down and 5.8% in value over the same period in 2020.
RECOMMENDATIONS
Vietnam's coffee export orientation in the coming period
To increase the value and reach the export target of 6 billion USD by 2030, it is necessary to develop Vietnam's coffee industry in the direction of the value chain, strengthen the connection between production and trade, develop export markets, product development associated with brand building
Currently, Vietnam's coffee export output is on average 1.5 - 1.8 million tons/year, export turnover has always grown over the years to reach over 3 billion USD With the second position in export value, Vietnamese coffee has been present in 80 countries and territories around the world, concentrating mainly in major markets such as Germany, USA, Spain, Italy, Belgium, UK and emerging markets such as China, Russia, Korea, Japan, Taiwan, Philippines, Thailand
The domestic coffee market thrives with the presence of about 300,000 coffee shops across the country, of which many Vietnamese coffee retail brands are preferred by consumers Vietnam is one of the major coffee producing and exporting countries in the world, but the export value of coffee is not commensurate with its potential To enhance the value and aim for the export target of 6 billion USD by 2030.
To build a comprehensively developed agriculture in the direction of modernity, sustainably, produce large goods on the basis of promoting comparative advantages; Prioritize the development of key products following three main axes, including national key agricultural products, provincial key agricultural products and local specialty products; By 2030, Vietnam's agriculture will be among the 15 most developed countries in the world, in which the agricultural processing industry will be among the top
10 countries in the world; Harmoniously link the goal of agricultural export growth with the goal of sustainable agricultural development, application of high technology in production and processing, and increase the added value of agricultural products; Take advantage of opportunities from the fourth industrial revolution to develop; Agricultural export enterprises are identified as having the role of "pillars" in promoting the development of agricultural production in our country; International economic integration for the agricultural sector must be associated with the process of restructuring and changing the growth model of the country and the industry on the basis of promoting internal resources; Focusing on synchronously implementing international integration commitments in the agricultural sector, in which the focus is on solving problems related to technical barriers, ensuring the harmonization of the technical barrier system; Actively exploiting opportunities and advantages from international economic integration; expanding export markets; Participating in important and strategic market commitments of the region and the world, increasing access to important NS markets.
The development of trade in agricultural products between Vietnam and China must be based on the two countries' mutual commitments on trade, ensuring harmony and transparency; Developing NS trade with China based on building long-term, reliable partnerships or investment links with end consumers; Vietnam needs to be more proactive in its policy of border trade and gradually switch from small-scale to official trade; Policies and solutions to support trade are built on the basis of considering China as a traditional and important trading partner of Vietnam's agricultural sector.
China is a large but highly competitive market Therefore, in order forVietnam's coffee exports to this market to grow again, the Vietnamese coffee industry needs to actively change new designs, product packaging and improve quality to meet the increasing demand of Chinese consumers today In addition, coffee exporters need to focus on promoting the communication of their products and brands.
Recommendations
3.2.1 Raising awareness for coffee exporters about the Chinese market
First, regarding China's import regulations, the barriers from the import market.
Second, improve understanding of the business culture of Chinese enterprises and the consumption culture of Chinese consumers.
Third, improve the competitiveness of Vietnamese coffee.
Fourth, increase investment in building and developing an information system about the coffee market in the world.
3.2.2 Having an appropriate export strategy for Vietnamese coffee to the Chinese market
For the government: The government has the right orientation, enough about the market in China.
Vietnamese producers as well as exporters: Clearly define the importance of the Chinese market; Orientation on the need to diversify the agricultural export market; Clear orientation on export market coffee of your business;Promoting building and promoting the brand name of NS brand; Building long-term business strategies and plans with its own distribution network in the Chinese market; Improve professional level of international trade;Develop long-term strategy, business plan and distribution network.
3.2.3 Building and strengthening the link between partners and Vietnamese coffee exporters
For the government: Work closely to negotiate with coffee import markets and update information on new policies, tariff measures, technical barriers, and market information of other countries Actively seek and introduce agricultural industry associations, prestigious corporations and enterprises in other countries to promote cooperation with Vietnamese enterprises, and take advantage of the mobilization of ODA and FDI capital into agriculture and rural areas Support domestic authorities and enterprises to promote Vietnamese NS in other countries Provide information related to major orientations, NS products, market opening negotiations so that on that basis, trade counselors in other countries have information to work to support development.
For enterprises: Building a model of combining enterprises with farming activities planting, processing and exporting For small businesses, enterprises specializing in agricultural export: If farmers do not have their own farming areas, they should choose the option of establishing linkages with farmers through long-term contracts, with capital and technical assistance When equitizing agricultural purchasing and processing enterprises, enterprises should reserve a certain number of preferred shares to sell to farmers in raw material areas Proactively ensuring input supply of manufacturing enterprises should also be done in helping farmers improve labor productivity Limiting the effects of climate change is a green production model that reduces greenhouse gas emissions in agriculture It is extremely important for every agricultural product exporter to carefully learn information about the partner, verify the strength and reputation of the partner before the transaction Maintain regular investigation and update of information from Chinese partners Actively explore and focus on attending large-scale fairs and exhibitions.
Researching the possibility of cooperating with a number of Chinese agricultural export enterprises in the field of e-commerce to export and consume products and fruits through the form of e-commerce in this market.
3.2.4 Improving the economic and legal environment, promote the coordination of regulatory agencies
The Government in implementing policies to support the export of Vietnamese agricultural products to the Chinese market The government needs to create a favorable legal and economic environment By creating a favorable regulatory environment, the Government can mobilize more capital sources, thereby encouraging and attracting more investment from farmers and businesses Creating a favorable environment without interfering too deeply in the agricultural production chain is a common development trend in the world The government needs to limit direct intervention, mainly maintain and create a favorable environment for businesses to operate on their own.
3.2.5 Improving competitiveness for enterprises exporting Vietnamese agricultural products to the Chinese market
For the government: Create favorable conditions for businesses to access preferential capital The government needs to create a competitive credit environment, such as possibly agriculture-specific banks.
For enterprises: Improve the quality of corporate governance Enterprises need to innovate human resource management in enterprises, especially small and medium-sized enterprises, in order to standardize recruitment,evaluation and use of labor in these enterprises to improve their ability meet the standards of labor conditions set by the importers.
3.2.6 Focusing on solutions to boost coffee exports
In order to take advantage of opportunities, limit difficulties, support the coffee industry to increase its value, and maintain its second position in the world in the coming time, the coffee industry needs to focus on solutions such as:
Firstly, concerned ministries, branches and localities need to find solutions to remove difficulties, support farmers and businesses to attract investment, apply science and technology, and improve the quality of human resources; at the same time, encourage and strengthen linkages and cooperation in coffee production and business with the aim of stabilizing exports, maintaining and expanding markets.
Second, continue to review and supplement the plan to replant old, low- yielding and poor-quality coffee gardens under the coffee replanting program in the 2021-2025 period Accordingly, reducing the area to 670 thousand hectares, the output from 1.8 to 1.9 million tons/year; develop key production areas in the Central Highlands and the Southeast Promote replanting and grafting of old coffee gardens; using 100% coffee varieties with high yield and quality; intercropping industrial crops and perennial fruit trees with eligible re-cultivation coffee areas; increase investment in deep processing to improve the quality of coffee for export and domestic consumption.
Third, encourage coffee export processing enterprises to invest in modern processing technology lines; pay more attention and interest in building brands, developing products, building strategies for promotion, marketing,and brand positioning in accordance with the capacity of each business TheState supports enterprises in building and developing their brands through communication campaigns, image promotion, training programs, guidance, capacity building, product design, product formats and ways to create new products, brand building and promotion.
Fourth, coffee businesses need to actively attend international fairs and exhibitions held at home and abroad to introduce products and find export partners At the same time, update information and changes in trade developments to promptly adjust production and business activities of their enterprises in accordance with the signals of the market.
Fifth, coffee exporters need to effectively implement the FTAs that Vietnam has signed into coffee export activities, thereby increasing competitiveness, expanding markets and raising prices Brand value of Vietnamese coffee export products.
Fifth, it can be seen that, under the influence of the Industrial Revolution4.0 and the global Covid-19 pandemic, the logistics service industry also needs major changes to be appropriate in the new period The government continues to modernize the management process in the logistics sector;allow enterprises to process, pack and label goods at bonded warehouses;create linkages between elements in the supply chain, such as: Customs,ports, road carriers, shipping lines to help reduce delivery time To reduce costs for businesses, it is necessary to continue to strengthen the simplification and transparency of customs procedures to reduce costs and increase predictability for businesses Accordingly, it is necessary to quickly build and use electronic data exchange systems between enterprises,customs and related agencies.
China is a large and potential market, sharing a common border and an important leading economic partner of Vietnam These market factors affect the economy of Vietnam in general and the export of Vietnamese agricultural products to the Chinese market in particular To quantify and confirm the impact of the above factors on the export activities of enterprises exporting Vietnamese agricultural products to the Chinese market In recent years, the Government has issued many policies to promote export activities in general and the export of agricultural products and coffee to China in particular However, in order to follow the viewpoint of Vietnam's view of promoting agricultural exports by 2030 and the view of Vietnam's NS trade with China, the study has suggested a number of policies for the Government and enterprises exporting Vietnamese agricultural products Compared with previous studies, this study has systematically analyzed the factors affecting the export of agricultural products of Vietnamese enterprises to China.
Although there are some limitations, the study also brings some meaningful results on theoretical and practical basis It is the thesis that affirms that the use of resource theory and contingency theory in studying factors affecting the export activities of Vietnamese agricultural exporters to the Chinese market is appropriate, and can be used apply this theory to other fields At the same time, this study clarifies the factors that belong to the export of agricultural products, quantifies those impacts to assess the role of each factor in the export of agricultural products in order to propose appropriate policies cooperation to promote the export of agricultural products and coffee from Vietnam to China, contributing to socio-economic development in Vietnam in the coming time.