Vietnam
Did you know?
About
Vietnam extends along the east coast of the Indochina peninsula in southeast Asia, with the South China Sea to the east and south. The Red River (Song-koi) delta lowlands in the north are separated from the huge Mekong delta in the south by narrow coastal plains backed by the generally rough mountainous and forested terrain of the Annam highlands. Most people live in the river deltas. The climate is tropical, with summer monsoon rains.
Over three quarters of the working people are involved in agriculture, forestry and fishing. Rice growing is the main activity, and Vietnam is the world's third largest rice exporter, after the USA and Thailand. On the coffee market, Vietnam is the world's second largest coffee producer after Brazil. But is looking forward to become the first coffee exporter in the world. The other main cash crops are: pepper, tea, rubber and coco.
The population is relatively well distributed, with big cities in both extremes of the country. But the northern provinces are still more populated than southern.
The north is fairly rich in minerals including some oil, coal, iron ore, manganese, apatite and gold. The food processing and textile industries are important, but the steel, oil and gas and car industries are growing rapidly. The 1992 economic reform program, inflow of foreign investment and the 1994 lifting of the US trade embargo boosted an economy which suffered from decades of war and strife.
Mainly Robusta
Although coffee has been cultivated in Vietnam for more than a hundred years, it wasn't until the 1980s that Vietnamese authorities began realising coffee's true potential. Since then, the government has been paying great attention to intensify the Robusta production and expanding the Arabica area in the north.
Resettlement of labour, foreign assistence and profitability in coffee cultivation have been the key factors in the expansion of Vietnam's coffee growth and exports since the 1980s. Vietnam, an ICO member, is predominantly a Robusta producer. Robusta coffee growing is concentrated in the central highland provinces of Dak Lak, Dong Nay, Lam Dong and Gialai Kontum. Whereas Arabica coffee has found very suitable soil and terrain in the northern provinces of Lanson, Coaban, Hoabinh, Sonla, Laichan, Nghean and Quangtri.
Until the mid 1970s, when Vietnam began decollectivising its agriculture, coffee was mainly produced on large plantations. Migrant families were resettled from densely populated northern areas on small plots of land, where the large majority of output capacity was installed from 1983 to 1989 through financial aid from Eastern Europe and the former Soviet Union. As a result, the largest output of coffee now comes from the privately owned one or two hectare holdings developed by the families. The remainder is produced on state owned plantations. These state farms are operated under the supervision of VINACAFE, the national coffee agency, by former officers of the Vietnamese army and their families.
Over 90 per cent of the coffee produced in Vietnam is Robusta. However, the government is promoting the expansion of Arabica areas, particularly in the North Uplands region.
The French development assistance agency is helping to expand the Arabica area by 40,000 hectares in the north.
It is important to remember that coffee was really important for the country transition to a peace period after two long wars. The product is already linked to the Vietnamese identity, and the country has become a main actor in the coffee scene in three decades. The internal consumption is increasing at important rates.
The main problems for Vietnamese coffee production today are the global warming and modernization of the plantations. Vietnam is in particular sensible area if the planet keeps warming at a high rate: floods in the low areas, typhoons and droughts in the mountains will be some consequences.
Coffee facts
Crop Periods
Flowering Period |
|
Main : From November until February (1) |
(1) About flowering
The flowering of the coffee trees is generally triggered by rainfall and the trees produce coffee cherries 6-9 months after flowering.
Harvesting Period |
|
Main : From September until March |
Harvesting is done by hand and is quite labour-intensive. Strippicking (removing all the cherries from the tree at one time) is commonly done for Robusta coffee. Selective picking (selecting the ripe cherries for harvesting in the course of several picking sessions) is used with Arabica coffee, particularly when the wet processing method is used.
Shipping Period |
|
Main : From January until September |
Transit in days
|
Port of Shipment |
Imp. |
EU |
US |
|
Saigon |
85% |
24 |
28 |
|
Nha Trang |
5% |
26 |
30 |
|
Haiphong |
10% |
26 |
30 |
Destination countries
1.USA
2.Germany
3.Poland,Canada, Japan, Spain, South-Korea
Vietnam's coffee has been exported to 54 countries worldwide, including the United States, Germany, Italy, Spain, Belgium, France, Poland, the United Kingdom, Japan, Austria, the Republic of Korea, Canada and the Netherlands.
Nice to know
Vietnam has by far been the fastest grower in coffee production for the last decade. Vietnam used to produce only 10.000 mt in the early eighties, now it's the second largest producer in the world. The arabica production exceeds already the production of some Central America countries.
ICO Figures
Classifications
Varieties
Arabica
Typical varieties for Arabica are Bourbon Typica of Cuba, Catura Amarello and Mundo Novo, for Robusta the Canephora.
By Region
Coffee production is concentrated in the Central Highlands (80%) and the Southeast (16 %) for Robusta and Northern for Arabica.
The province of Dak Lak alone produces about 58 % of the national coffee output, with Dong Nai and Lam Dong contributing 13-16 % each.
The average yield is 1.8 to 2.0 ton per hectare. There is some regional variation in yield, with the most important coffee producing regions having higher yields than the rest of the country. For example, the yields in the Central Highlands and the Southeast are around 1.9 ton/ha compared to less than 1.1 ton/ha in the other regions.
By screensize
The official criterion standards for each grade are:
Grade 1: > 7 mm
Grade 2: > 6-7 mm
Grade 3: > 5 mm
In practise, a wide variety of screen sizes are offered. Grade 1 Vietnam robusta is often offered either as "screen 16" or as "screen 18".
By defects
Whereas there are supposedly only three official grades in Vietnam robusta: grade 1, 2 and 3 with their respective defect table, traders became very creative in working out exhaustive descriptions for different qualities. A typical example would be: Vietnam Grade 2 - 5% (max 5 % blacks and brokens, max 1 % admixture and pods, max 1 % Excelsa beans, max 13 % moisture, 95 % above 5mm.).
Such a description, although very common, has little to do with the official grades as described below.
The official criterion standards for each grade are:
 |
Grade 1 |
Grade 2 |
Grade 3 |
|
Humidity |
12% |
12% |
13-15% |
|
Foreign material |
0.5% |
0.5% |
1.0% |
|
Blacks & Broken beans |
2-3% |
2-3% |
4-5% |
|
Bean size |
>7 mm |
>6-7 mm |
> 5 mm |
|
Vietnam standard for Black Bean |
Externally and internally : Coffee bean where more than one half of the external surface and interior is black (blue-ink color). A brown bean is not a black bean. |
|
Vietnam standard for Broken Bean |
Fragment of a coffee bean, in volume equal to or less than half a bean. |
Additional classification, agreed upon in November 2001
| A new classification has been established in order to make the comparison with the Indonesian grades easier. Arabica coffee is classified in the following grades :
|
A typical description
Vietnam Grade 2 - 5%
(max 5 % blacks and brokens, max 1 % admixture and pods, max 1 % excelsa beans, max 13 % moisture, 95 % above 5mm.)
Nice to know
Vietnam Excelsa beans are not much appreciated since they have a pronounced pharmacopical taste. Therefore most of the buyers will include a limit on the Excelsa content of their purchase.
Processing
|
Picking |
Strippicking or Selective-picking, all by hand |
|
Washing |
Dry method, using (locally made) machines that are operated manually |
|
Fermentation |
The bulk of the (small) Arabica crop is sundried |
|
Drying |
Sundried on cement floors |
|
Sorting |
Manually and some eletronic sorting |
Washing
The coffee cherries are dried and dehulled by the farmers and then sold to buying stations. This coffee is sold and delivered partially cleaned. Processing plants either buy the mixed beans from the farmers through these buying stations or collect the coffee directly from plantations with whom they have ties. Most of the processing plants are severely outdated and in need of upgrading.
A lot of the processing is done manually although sometimes an old calibrating machine may be available. Very few producers have a wet processing facility and those who do, often lack the experience and know-how to use it properly.
Drying
Many of the state farms use brick drying yards and some farmers have invested in concrete yards or plastic sheeting, but the overall capacity is limited.
According to one source, Vietnam has just 0.8 hectares of suitable drying ground per 100 hectares of producing coffee, compared to the optimal level of 3 hectares per 100 hectares of coffee.
The remainder of the coffee is dried on the ground or even on roads. This practice introduces stones, dirty and other foreign material. Some of this foreign material can be removed in processing, but at a cost. Off-colour beans can also be removed in processing, but this requires laborous hand selection or expensive colour sorting machinery.
Sorting
Presently the farmers are drying the red cherries, dehulling them and then selling them (partially cleaned) to purchasing stations in their area for further processing. The Vietnamese factories, if not rudimentary workshops, are generally unable to cope with the world market standards especially in view of the ever growing large quantities of coffee which need to be processed.
Coffee Environment
State farms
In the past, almost all coffee in Vietnam was Robusta and most of it was grown on state farms. The harvested cherries were dried and delivered to the state farm processing plant.
State farms processing plants generally have capacities of around 3000 ton.
The green beans would then be delivered to the port for export under a government-to-government contract.
Since "Doi Moi" (Vietnamese Communist Party's term for reform and renovation in the economy), the marketing channels have become much more complex. Farmers associated with a state farm generally sell their output to the state farm processing plant, though they have the option of selling some coffee elsewhere, provided they fulfil their financial responsibilities towards the state farm. This option has created problems for some state farms, because farmers can more easily avoid repaying debts to the farm management. Independent farmers may sell the dry cherries to a private trader, to an agent of a processing plant, or directly to a processing plant. An increasingly common pattern, however, is for the farmer to pay a small coffee processor to hull the dry cherries, retaining ownership of the green beans.
These small processors are privately owned, locally made hullers with capacities of less than 1000 ton/year.
Many of them are mobile, allowing them to be moved from one production area to another during the harvest season.
The resulting green beans are not very clean and need to be reprocessed for export. On the other hand, the beans (unlike the dry cherries) can be stored for up to two years,
giving the farmer the option of holding the coffee in expectation of a high price.
In addition, these small processors reduce the weight of the coffee by 40-44 percent, reducing the cost of transporting the coffee to a larger processing facility.
One researcher estimates that about one half of all coffee is processed this way. The green beans are eventually sold to a trader or an agent of a larger processing plant.
State owned enterprises with processing plants, including both state farms and specialised processor exporters, are allowed to export directly.
Nice to know
Coffee exports now account for 6-12 % of the total value of exports, making it the second most important export crop after rice.