Effect of the German trade policy on the Germany – Vietnam trading 2.2.3.2.. In this research, we will take a dive into the complex relationship between Germany''''s international trade pol
Rationale of Research
Germany, being one of the key players in the global trading scene, holds a significant influence on how businesses around the world operate Its trade policies go beyond its own borders, and this in turn has left a big impact on how businesses in different parts of the world plan what they're going to make and how they're going to sell it This applies to a plethora of nations, including Vietnam and the company Vinacafe – a company that produces coffee-based beverages and foods The task of understanding how Germany's trade policies impact specific industries, such as the instant coffee sector, is pivotal for businesses like Vinacafe if they want to successfully export their products to this country This rationale stems from the recognition that trade decisions made by Germany can reverberate through supply chains, shaping the export strategies of businesses worldwide By grasping this dynamic, Vinacafe can navigate the complexities of international trade and optimize its market reach in Germany.
Research Aims and Objectives
Aim: To comprehensively investigate the impact of Germany's trade policy on
Objectives: ã Examine the evolution and current stance of Germany's trade policy. ã Evaluate the existing economic relationship between Germany and Vietnam ã Scrutinize the regulatory framework governing instant coffee imports in
Germany. ã Analyze historical trade data to identify patterns and trends in Vinacafe’s instant coffee export. ã Predict potential future scenarios and their implications for Vinacafe’s export strategy.
Research Methods, Scope, and Subject ã Methods: Utilize a combination of qualitative and quantitative research methods, including interviews, data analysis, and literature review. ã Scope: Investigate the impact of Germany's trade policy on Vinacafe’s instant coffee export over the past decade, considering regulatory, economic, and market factors. ã Subject: Focus on the intricate relationship between Germany's trade decisions and the dynamics of Vinacafe’s instant coffee export.
Structure of the research
OVERVIEW OF THE GERMANY AND ITS ECONOMIC
Introduction to Germany: 1 Main Economic Characteristics of Germany
1.3 The Germany – Vietnam economic relations
ANALYSIS OF GERMANY’S TRADING ECONOMY
Analysis of the German Trade Policy and how it affects coffee products
CHAPTER 3: FINDINGS OF GERMANY’S TRADING ECONOMY
3.1 Opportunities and Limitations for Vietnam and VinaCafé
3.2 Implications for Vietnam government and firms
FINDINGS OF GERMANY’S TRADING ECONOMY
Opportunities and Limitations for Vietnam and VinaCafé
3.2 Implications for Vietnam government and firms
CHAPTER 1: OVERVIEW OF THE GERMANY AND ITS ECONOMIC
1.1 Introduction to VinaCafe - A Vietnamese coffee-based company:
Vinacafe is a prominent Vietnamese coffee company that has made a significant mark in the global coffee industry Known for its rich history, commitment to quality, and innovative approach, Vinacafe has become a key player in the international coffee market This introduction will focus on Vinacafe's background and its noteworthy exports to Germany, shedding light on the company's contributions to the coffee trade and its strategic positioning in the German market.
Founded in 1968, Vinacafe has evolved into one of Vietnam's leading coffee producers and exporters With a mission to deliver the finest coffee products to consumers worldwide, the company has consistently upheld high standards in cultivation, processing, and manufacturing Vinacafe's success is deeply rooted in the rich coffee- growing regions of Vietnam, where the ideal climate and soil conditions contribute to the cultivation of high-quality coffee beans.
Over the years, Vinacafe has embraced technological advancements and sustainable practices, ensuring that its products not only meet international quality standards but also adhere to ethical and environmental considerations This commitment to excellence has earned Vinacafe a strong reputation and a loyal customer base both domestically and globally.
Germany, renowned for its discerning coffee culture and appreciation for high-quality products, stands as a crucial market for Vinacafe The company's export to Germany has been characterized by strategic initiatives and a keen understanding of the German consumer preferences.
Vinacafe's coffee exports to Germany encompass a diverse range of products, including various coffee blends, instant coffee, and specialty products Leveraging the rich, aromatic flavors of Vietnamese coffee beans, Vinacafe has carved a niche for itself in the German market, offering a unique and distinctive coffee experience.
The company's success in exporting to Germany can be attributed to several factors, including a commitment to consistent quality, an understanding of market trends, and a focus on sustainable and ethical practices Vinacafe's products have resonated well with German consumers who seek not only great taste but also value the ethical and environmental aspects of the products they consume.
The export relationship between Vinacafe and Germany is not merely transactional; it reflects a broader partnership that spans cultural appreciation, business collaboration, and a shared passion for exceptional coffee Vinacafe's ability to adapt to the evolving preferences of the German market and its dedication to maintaining the authenticity of Vietnamese coffee have contributed to the company's success in this dynamic and competitive market.
In conclusion, Vinacafe's journey from a local coffee producer in Vietnam to a globally recognized brand is a testament to its commitment to quality and innovation The company's export to Germany signifies its strategic approach to international markets, emphasizing not only the richness of Vietnamese coffee but also the values and principles that define Vinacafe as a trusted coffee brand As Vinacafe continues to thrive in the German market, it reinforces the notion that a cup of coffee can transcend borders, connecting people and cultures through a shared love for exceptional coffee.
1.2.1 Main Economic Characteristics of Germany:
Germany has long been a strong player in Europe's economic scene, contributing a significant portion to the European Union (EU) It makes up about 25% of the EU's total economic output and is home to nearly 19% of the EU population However, recent times have brought tough challenges for Germany, as it's currently the only major economy experiencing negative growth in 2023 Once known for its quick economic recoveries, Germany is now seen as a drag on regional stability, demanding urgent economic changes.
In 2022, the average income per person in Germany was around €63,521.9, showing some improvement from the previous year Unfortunately, the overall economic situation is not as promising, with Germany's total income, known as GDP, experiencing a notable drop of -0.6% This is in sharp contrast to the broader euro zone, which saw a small growth of +0.6% The outlook is bleak for Germany, especially considering recent efforts to revive the economy falling short, as discussed in our latest report.
1.2.2 Trading Market Demand in Germany:
The trading market demand in Germany is a multifaceted landscape, shaped by the nation's prowess in various sectors and its commitment to innovation, quality manufacturing, and sustainability One of the standout sectors is the automotive industry, where Germany is a global leader, renowned for producing high-quality vehicles under iconic brands like Volkswagen, BMW, and Mercedes-Benz Despite facing challenges, the automotive sector remains a driving force in Germany's exports, contributing significantly to the country's economic strength The emphasis on precision engineering further underscores Germany's export-oriented economy, with its precision-manufactured machinery being sought after worldwide, highlighting the nation's dedication to innovation and technological excellence.
In the realm of consumer electronics, Germany boasts substantial trading markets From smartphones to home appliances, the German electronics industry is characterized by innovation, quality, and a strong global presence The nation's role in the semiconductor market is significant, reflecting its prowess in technological advancements This sector's dynamism contributes to Germany's diverse trading portfolio and showcases its adaptability to the evolving global technological landscape.
A pivotal focus on environmental sustainability positions Germany as a leader in renewable energy The trading market demand extends to power systems, including solar and wind technologies The nation's commitment to reducing carbon emissions shapes its trading strategies in the energy sector, making Germany a key player in fostering global sustainability efforts.
The textiles industry in Germany further enriches its trading landscape Contributing to the nation's diverse portfolio, this sector reflects Germany's dedication to manufacturing quality products Additionally, Germany's role in the semiconductor market showcases its commitment to remaining at the forefront of technological advancements.
While not the largest agricultural importer globally, Germany maintains substantial demand for agricultural products The growth in food consumption is influenced by factors such as urbanization, rising incomes, and evolving dietary habits Germany's commitment to sustainable agricultural practices contributes to the overall global food supply chain.
Implications for Vietnam towards future international trades
Europe in general and Germany to be specific, are quite demanding import markets In late 2022, the European Union (EU) implemented a directive prohibiting deforestation-related coffee imports, raising concerns about Vietnam's coffee export capacity to this market The challenge of Vietnam is that how to develope coffee in a more sustainable way Furthermore, the EU's tightening of pesticide residue regulations for beans, including coffee at 0.1 mg/kg, is also a difficulty, requiring farmers to adjust production methods in order to meet new standards for export activities The recent Europian decree not only imposes strict control on coffee export but also acts as a catalyst for foresting a more sustainable evolution within the coffee industry This involves a shift from merely expanding cultivation areas to enhance output, emphasizing greater consideration for productivity issues
To address this issue, for coffee beans to have the best quality, the coffee must be picked when ripe When the coffee ripens, its weight will increase by 10% This both helps increase coffee output and improve coffee quality during processing Not only do we focus on harvesting to create quality coffee beans, we also have to focus on traceability and planting area codes so as not to violate the importer's regulations,especially the European importers In addition, it is necessary to promote the expansion of coffee areas certified for sustainable production, with Utz Certified certifications (Global certification for responsible coffee production and trading);
Rainforest certification (Code of practice for developing biodiversity conservation and sustainable development globally implemented by the RA Organization); 4C certification (Coffee Community Common Code - is a global certification system for sustainable coffee growing and production); VietGAP certification (Vietnam's Good Agricultural Practices).
Logistic costs are no longer a new problem in Vietnam's exports, especially Germany is a country with a geographical distance quite far from Vietnam To solve this problem, on the government side, it is necessary to apply information technology and exchange data online to reduce paperwork costs, save time and help businesses control and manage information about goods anytime, anywhere At the same time, the government should have preferential policies for domestic businesses that meet service quality standards.
Coffee prices increased again in the context of a sharp decline in global coffee inventories Vietnam's coffee inventory is gradually decreasing and this is a sign that the global price of this commodity may increase further in the near future (Bloomberg, 2022) To take advantage of this market, Vietnam needs to boost production and improve product quality for stronger economic growth in the coming time
The price difference between Arabica and Robusta coffee in the context of concerns about economic recession, makes people tend to switch from consuming Arabica to Robusta to minimize costs but still be able to use coffee This means that demand may weaken but is not focused on Robusta, and is still positive news for Robusta coffee at the present time In Vietnam, Robusta is a widely grown coffee, with annual output much higher than Arabian coffee Therefore, the firms need to seize this opportunity to bring coffee products to the world market, especially Europe, to get the best profits and growth.
Deeply processed products such as instant coffee, roasted coffee, powdered coffee, canned coffee are the key to increasing the export value of Vietnamese coffee, while also creating Vietnamese coffee brands on the international market With today's fast and modern lifestyle, convenient products made from coffee are increasingly popular Exporting processed products helps increase the value of Vietnamese coffee, while saving transportation costs, bringing much more benifits compared with exporting green bean coffee
Despite the regional and global economic recession that has affected the Vietnamese coffee industry in the past few years, VinaCafe has remained faithful to the policies of the Party and State of Vietnam and has strived to enhance its professional qualifications, apply scientific and technical advances to production and boost productivity The Corporation has successfully overcome challenges and achieved remarkable results.
To become a true coffee powerhouse, Vietnam must first implement the Party and State's policies on agriculture, farmers and rural areas for coffee growing areas and coffee growers Coffee processing and exporting enterprises must focus on product quality, including meeting food hygiene and safety standards, in line with world consumption trends This will create strong brands with products of 100% natural coffee flavor, showcasing the unique and authentic flavor of Vietnamese coffee These are also the brands that will dominate the domestic market and compete in the international market, leading the agriculture industry as a coffee powerhouse With the ambition to create an innovative result, while inheriting and promoting the values of Vietnamese coffee heritage, Vietnam Coffee Corporation (VinaCafe) has continuously improved quality and created great coffee masterpieces The outstanding quality embodies the flavor and culture of Vietnamese coffee, captivating the taste and smell of all coffee lovers and enthusiasts; thereby, firmly establishing the Vietnamese coffee brand, bringing Vietnamese coffee to the world level.
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