Bloomberg: Global Coffee Supply Dealt Fresh Blow by Vietnam’s Virus Curbs

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Vietnam gained US$2.7 billion from shipping an estimated 1.7 million tonnes of coffee abroad in 2020. Photo: VietnamPlus

World coffee supplies are suffering a fresh setback from stringent travel curbs imposed in second-biggest grower Vietnam to control Covid-19 spread, according to Bloomberg.

The government has put Ho Chi Minh City, the exporting hub, under social distancing because of a surge in virus infections, and tightened movement controls in some key producing areas of the Central Highlands.

Exporters are struggling to transport beans to the ports for shipment, Bloomberg cited traders and suppliers as saying. That’s adding to a raft of other logistical problems such as a dire shortage of containers and soaring freight rates.

Trade groups, including the Vietnam Coffee-Cocoa Association, have petitioned the government to ease the curbs.

A farmer harvests coffee beans in the central highlands province of Gia Lai on December 12, 2020. Photo: VnExpress

In response, Transport Minister Nguyen Van The this week ordered authorities in the south of the country to do everything possible to facilitate the transport of farm products, such as coffee and rice.

He told local governments they must avoid all unnecessary requirements and burdensome paperwork.

Vietnam gained US$2.7 billion from shipping an estimated 1.7 million tonnes of coffee abroad in 2020, accounting for over 10% of the world’s coffee value and 18% of the market share, according to the Ministry of Agriculture and Rural Development (MARD).

Coffee is among ten key products of Vietnam, and is in top six products with export value topping $3 billion each year.

The country has 664,000 hectares of coffee plantations with a yield of 1.5 million tonnes per year, 93% of which are grown with coffee robusta while the remainder being Arabica. Vietnamese coffee has been present in 80 countries and territories worldwide.

Optimising trade pacts to boost coffee export

Vietnam’s coffee industry also gains competitive edge over its rivals since it is among 30 Vietnamese geographical indications recognised and protected by the EU under the trade agreement. Photo: VNA

A wide range of free trade pacts such as the EU-Vietnam Free Trade Agreement (EVFTA) are billed as catalysts that help Vietnamese coffee reach out to the world, Vietnam Plus said.

Under the EVFTA, the EU removes tariffs on all unroasted or roasted coffee products (from 7-11% to 0%), and processed coffee (from 9-12% to 0%) since the deal took effect on August 1, 2020.

Vietnam’s coffee industry also gains competitive edge over its rivals since it is among 30 Vietnamese geographical indications recognised and protected by the EU under the trade agreement, he added.

In a bid to effectively carry out the EVFTA, the ministry asked localities to apply state-of-the-art technologies into coffee cultivation, processing and preservation to meet requirements of EU importers.

Localities are also encouraged to increase the percentage of specialty coffee plantation, register geographical indications and build brands for their coffee products.

The Ministry of Industry and Trade’s Foreign Trade Agency said Vietnam has envisaged to develop the coffee sector in a uniform and modern manner, aiming to rake in $6 billion from coffee exports by 2030./.

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