Vietnam was once a colony of France. Coffee tree was first introduced by Frenchmen to Vietnam in 1857. In 1888, the first coffee plantation was founded in Vietnam. However, the output volume of coffee was small in Vietnam before 1975. Vietnam’s coffee industry took off after the Vietnam war ended in 1975, especially after East Germany signed the coffee procurement agreement with Vietnam. In 1976, Brazilian coffee beans underwent poor harvest so that the price of coffee rose suddenly and sharply. In 1977, East Germany signed an agreement with Vietnam to assist coffee bean planting. During 1975 to 2010, the planting area of coffee beans increased from 134,000 hectares to 513,000 hectares, up with more than 30 folds. For many years, Germany is the largest export destination of Vietnamese coffee beans.
According to CRI, the coffee trees planted in Vietnam are mainly Robusta and Arabica coffee. Southern Vietnam is humid and hot, suitable for growing Robusta whereas the northern part is suitable for Arabica. In 2014, total coffee cultivation area in Vietnam was 653,000 hectares, increasing by 2.7% YOY. This was 30 times the area in 1961. Export value of coffee beans accounts for around 15% to 20% of the total export of agricultural products in Vietnam. Commercial coffee production provides jobs for over 500,000 farmers with income growth.
Presently, Vietnam forms strong production capacity of coffee bean rough processing and deep processing. The designed rough processing capacity is 1.5 million tons/year, coffee bean baking and coffee powder processing capacity is 52,000 tons/year and instant coffee production capacity is 36,500 tons/year.
The proportion of baking and instant coffee deep processing with high added-value is growing. Vinacafe, Trung Nguyen, An Thai, Me Trang and Phuong Vy are famous coffee brands recognized by consumers. Meanwhile, coffee processing devices and facilities made in Vietnam are sold to the domestic and foreign markets.
According to CRI, Vietnamese coffee is popular in the world. The export volume and value present a fast growing trend. During 1991-1995, the annual export volume of Vietnamese coffee beans was only 142,000 tons, with the annual export value of only USD 210 million. During 2006-2016, the export volume exceeded 1 million tons with the highest yearly export value exceeding USD 3 billion.
Coffee is very cheap in Vietnam and is a favorite drink of Vietnamese. According to CRI investigation, the price of a cup of coffee is low to only USD 0.5 in Vietnamese street, which is affordable for any class of the society.
According to CRI, the planting area of coffee beans expands continuously in Vietnam. The output volume grows accordingly, which promotes the processing, sales and export of coffee beans. Coffee has formed a complete industry chain in Vietnam, which is also an important part of Vietnamese economy providing millions of job opportunities.
CRI forecasts the output volume of Vietnamese coffee beans will keep growing and both domestic demand and export volume will grow accordingly.