Report Practices Of International Trade Topic Export The Vietnamese Coffee.pdf

Table of Contents Chapter 2: The actual situation and the process of exporting coffee from 2.1.1 The situation of coffee production and export in Vietnam in recent years..

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

LIST OF GROUP MEMBERS

Conclusion Chapter 2 Synthesis the source

COMMENTS FROM LECTURER

Table of Contents

Chapter 2: The actual situation and the process of exporting coffee from

2.1.1 The situation of coffee production and export in Vietnam in recent years

2.4.2 Impacts of the state to support farmers/export businesses 16

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 8 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 8 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 7 months of 2020, the country exported more than 1, 5 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 do research to develop these models and types of products in the near future in order to meet customer needs

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 9 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-investeda 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 tule 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:

export the products for which it has a resource strength and vice versa On the

basis of the difference between the resource factors, itis identified and assumed

to be the structure of international trade However, there are still many studies showing conflicting results

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 3 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

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