The Magic of Vietnamese Specialty Coffee: A Brew Worth Twice the Global Price

Small-scale, sporadic production

On May 17, at the workshop “Vietnamese Coffee: Increasing Benefits for Farmers, Supporting Export Enterprises” held by NLD newspaper, market expert Nguyen Quang Binh said that although Vietnam is the world’s second-largest coffee exporter, it has not been able to promote deep processing to enhance its value. Specifically, Vietnam produces about 1.6-1.8 million tons of coffee per year, but up to 90% of the output comes from small-scale households, with each garden producing only a few tons. It is rare to find a farm with an output of 100 tons or more. This poses limitations on processing investments.

In addition, Vietnam’s domestic consumption is still quite weak. Currently, only about 5-10% of the total coffee output is consumed domestically. Meanwhile, Vietnamese farmers, with a yield of only 3-5 tons per household, do not have the conditions and capacity to invest in deep processing or wait for higher prices. They often have to store their produce themselves, leading to disadvantages in competition.

“To create added value, we need the counsel of associations and local governments to gather production units and build cooperatives with a minimum scale of 1,000 hectares. Only then can we consider investing in infrastructure, processing, and enhancing the brand,” said Mr. Binh.

Many enterprises believe that most farmers still engage in small-scale and sporadic production. With coffee prices at around 150,000 VND/kg for unprocessed beans and 170,000 VND/kg for processed ones, if farmers lack capital and skills in market prediction and cost control, it is challenging to ensure efficient production and business.

To ensure sustainable benefits for coffee growers, it is necessary to increase the rate of deep processing to 40-45%. In reality, there is still a lot of room for developing deep-processed coffee, specialty coffee, and the domestic market. However, inherent obstacles such as lack of capital and support from banks and policies have not been addressed.

Towards Sustainable Development

According to the Ministry of Agriculture and Environment, coffee exports in the first four months of this year reached 662,900 tons, worth 3.78 billion USD, a decrease of 9.8% in volume but an increase of 51.1% in value compared to the same period last year.

Mr. Trinh Duc Minh, Chairman of the Buon Ma Thuot Coffee Association, said that this year’s coffee export target could exceed 6 billion USD. Currently, about 10% of coffee output is subjected to deep processing, with an average value of about 6,000 USD/ton, contributing to increased export turnover. Notably, Vietnam has started producing specialty coffee with prices 1.5 to 2 times higher than the global average.

Ms. Bui Hoang Yen, in charge of the Ho Chi Minh City office of the Trade Promotion Department, Ministry of Industry and Trade, said that in the context of increasing competition in the coffee export market, especially with increasingly stringent requirements such as sustainability certificates and no deforestation… In recent times, the Ministry of Industry and Trade has coordinated with localities and industry associations to implement many practical solutions.

One of the highlights is the development of geographical indications to enhance the value and protect the brand of Vietnamese coffee products in the international market. At the same time, the Ministry also actively supports the promotion of coffee abroad through various trade promotion channels.

“To access premium markets, export products must have carbon credits. Therefore, the Ministry is coordinating programs on digital transformation, sustainable exports, and skills enhancement for enterprises. Even farmers are being guided on how to livestream to sell their products more effectively,” shared Ms. Yen.