Vietnam matures into world’s second-largest coffee producer

December 25th, 2008 - 8:54 am ICT by IANS  

Buon Me Thuot (Vietnam), Dec 25 (DPA) This southeast Asian nation’s coffee industry has experienced rapid development over the past 25 years. Coffee plantations have mushroomed from a mere 22,000 hectares to currently half a million hectares, which makes Vietnam today the world’s second-largest coffee producer behind Brazil.In 2007, Brazil harvested 36 million sacks of 60 kg each, while Vietnam’s harvest tallied in at 18 million sacks. Number three producer Colombia trailed with 12 million sacks.

Some 85 percent of Vietnam’s coffee is cultivated in the central highlands, about 700 km north of the southern metropolis Ho Chi Minh City, formerly known as Saigon.

Almost everyone in Buon Me Thuot, the capital of Dak Lak province, is involved in the industry one way or another.

In 2001, global output was 112 million sacks, but this year the figure is expected to reach 132 million sacks.

“We have produced coffee for some 100 years,” says the chairman of Vietnam’s Coffee and Cocoa Growers Association Luong Van Tu.

Annual production has reached about one million tonnes this year with an export value of roughly $2 billion.

Vietnam primarily cultivates Robusta coffee. Higher-quality Arabica beans only grow at relatively cool, higher elevations, which Vietnam only has in the northern mountain ranges bordering China.

But the country already plans to increase its Arabica plantations there from the current 20,000 hectares to 100,000 hectares over the next few years.

Last year, Vietnam exported about 177 tonnes of coffee to Germany, 134 tonnes to the US and some 95 tonnes to Spain, its three largest customers.

Despite increasing output, quality is still a major problem. It is estimated that up to 30 percent of Vietnamese coffee exports are rejected as “sub-standard” in ports like Rotterdam.

“If the Vietnamese would produce less and instead put more emphasis on quality, that problem would not exist. Of course, there is competition, but the coffee market is large enough to accommodate every producer,” Nestor Osorio, director of the World Coffee Organisation, said at a conference in Ho Chi Minh City this year.

It appears that Vietnam has taken the hint seriously, because quality improvement has now become a government programme driven particularly by the Agro-Forest Research Institute in the western highlands.

Foreign organisations like the German Society for Technological Cooperation (GTZ) lend a helping hand.

Under the organisation’s tutelage, farmers learn how much water the trees need for optimal growth, how much fertilizer, and how the trees have to be pruned to enhance the harvest quality.

GTZ is also supporting several cooperatives striving to adhere to the so-called 4C (Common Code for the Coffee Community) standard that prescribes rules for sustainable coffee farming under social and ecological minimum requirements in production and processing.

As with other agricultural produce, more importers are putting importance on quality certifications.

A buyer for one of the large foreign importers is likely to pay a higher price for coffee under 4C certification.

Coffee drinking, meanwhile, lags far behind production and export. Only some seven percent of annual production stays in the country.

“I may drink a single cup in the morning to wake me up for the working day. But we are Asians. We prefer to drink tea,” says farmer Nguyen Khee Tao.

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