The Coffee Export Conundrum: Can We Hit the $6 Billion Mark?

Speaking at the seminar “Vietnamese Coffee: Increasing Benefits for Farmers, Supporting Export Enterprises,” organized by NLD newspaper on May 17, Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association, shared that the coffee export target for 2025 could exceed $6 billion, with an estimated production volume of 1.7-1.8 million tons.

According to data from the Ministry of Agriculture and Environment, despite a nearly 10% decrease in export volume compared to the same period in 2024, the coffee industry achieved impressive results in the first four months of this year, with an export turnover of $3.78 billion, marking a 51.1% increase in value.

As the world’s second-largest coffee exporter and a leader in robusta coffee exports, Vietnam made significant strides in 2024, recording coffee export earnings of $5.43 billion. This remarkable achievement marked the highest turnover in a coffee crop year to date and the first time surpassing the $5 billion milestone.

The EU remains the largest export market for Vietnamese coffee, with Germany, Italy, and Spain being the top three consuming countries, accounting for 11%, 8.1%, and 8% of Vietnam’s coffee exports, respectively.

The surge in coffee prices over the past two years has brought substantial benefits to the industry. Mr. Trinh Duc Minh attributed this success not only to the increase in export volume but also to the growing proportion of processed coffee, particularly instant coffee. Presently, around 10% of the coffee output undergoes deep processing, fetching an average value of $6,000 per ton, thus contributing to higher export earnings.

Vietnam has also ventured into the production of specialty coffee, commanding prices that are 50-100% higher than the global market rates.

Market expert Nguyen Quang Binh offered insights into why Vietnam primarily exports raw coffee with minimal deep processing. He attributed this to the normal dynamics within the global supply chain. Mr. Binh emphasized the importance of considering the realities of production in Vietnam, where smallholder households produce and harvest approximately 1.6-1.8 million tons of coffee annually, with 90% of the output originating from these small-scale operations. Each household typically yields 3-5 tons, and it is rare to find farms producing over 100 tons. This fragmented production landscape poses challenges in terms of investing in deep processing.

Additionally, the low domestic consumption of coffee in Vietnam, estimated at only 5-10% of the total output, contrasts with Brazil, the current leading exporter, where domestic consumption accounts for over one-third of their production. Robust domestic consumption provides stability for deep processing and enhances the value of the product.

Mr. Gruber Alexander Lukas, Director of Alambé Vietnam, a professional roasting and grinding company, suggested that Vietnam should focus on its strengths, such as Robusta coffee. Robusta is renowned for its robust flavor and is recognized as a high-quality coffee variety.

Mr. Lukas proposed that Vietnam should promote coffee not merely as a beverage but as a cultural element, reflecting the passion, dedication, and regional characteristics inherent in every cup. Emphasizing the authenticity and international quality standards of Vietnamese coffee through the promotion of 100% pure roasted and ground coffee with certified quality will elevate its reputation in the global market.

Mr. Nguyen Ngoc Luan, CEO of Meet More Coffee, a global trading link company, shared that Vietnamese coffee has been enthusiastically received in international markets. In the past two years, Meet More Coffee has exported an average of 1,800-2,000 tons annually to countries like South Korea, Russia, Australia, China, and the United States.

However, businesses and experts agree that there is a need to reorganize production to meet coffee standards and enhance quality. Importing countries are now imposing new requirements, such as carbon credit standards. Therefore, it is essential to restructure farmer organizations and establish sustainable development-oriented raw material regions. Additionally, the deep processing rate should be increased to 40-45%, and farmers need to enhance their market capabilities by analyzing trends, proactively storing goods, and selling at optimal prices. These collective efforts will propel the Vietnamese coffee industry towards surpassing the $10 billion export turnover milestone.