Coffee production in Vietnam

Terraced Coffee Plants in Vietnam

Coffee production has been a major source of income for Vietnam since the early 20th century. First introduced by the French in 1857, the Vietnamese coffee industry developed through the plantation system, becoming a major economic force in the country. After an interruption during and immediately following the Vietnam War, production rose once again after Đổi mới economic reforms, reaching 900,000 tons per year in 2000. In 2009, Reuters reported Vietnamese coffee exports at "an estimated 1.13 million tonnes" for the previous year, stating that coffee was second only to rice in value of agricultural products exported from Vietnam.[1]

History

Coffee trees on the Cressonnière plantation, near Kécheu. 1898

Coffee was introduced to Vietnam in 1857 by the French and slowly grew as producer of coffee in Asia. The height of coffee production occurred in the early 20th century as small-scale production shifted towards plantations. The first instant coffee plant, Coronel Coffee Plant, was established in Biên Hòa, Đồng Nai Province in 1969, with a production capacity of 80 tons per year.

The Vietnam War disrupted production of coffee in the Buôn Ma Thuột region, the plateau on which the industry was centered.[2] Although seldom involved in conflict, the area was a crossroads between North and South and was largely depopulated. After the North Vietnamese victory, the industry, like most agriculture, was collectivized, limiting private enterprise and resulting in low production.

Following Đổi mới reforms in 1986, privately owned enterprise was once again permitted, resulting in a surge of growth in the industry. Cooperation between growers, producers and government resulted in branding finished coffees and exporting products for retail. It was during this time that many new companies involved in coffee production were established, including Đắk Lắk-based Trung Nguyên in 1996 and Highlands Coffee in 1998. Both of these continued on to establish major brands distributed through a widespread network of coffee shops. By the late 1990s, Vietnam had become the world's #2 coffee producer after Brazil, but production was largely focused on Robusta beans—considered inferior to Arabica due to their bitterness—for export as a commodity. Recent government initiatives have sought to improve the quality of coffee exports, including more widespread planting of Arabica beans, the development of mixed-bean coffees, and specialty coffee such as kopi luwak (Vietnamese: cà phê chồn, "weasel coffee").

By 2000, coffee production had grown to 900,000 tons per year. Price decreases, however, led annual production to drop to around 600,000 tons/year in 2003.[3] In 2009, Reuters reported Vietnamese coffee exports at "an estimated 1.13 million tonnes" for the previous year, stating that coffee was second only to rice in value of agro-products exported from Vietnam.[1]

The country's 2013/2014 coffee crop is expected to be a bumper harvest of around 17 million to 29.5 million 60-kg bags. Such a large production will add to a global oversupply of beans and will pressure coffee prices which have lost about 10 percent since October 2012. The country's coffee industry has taken a hit; of the 127 local coffee export firms that operated in 2012, 56 have ceased trading or shifted to other businesses after having taken out loans they can't repay. A few firms, such as Vietnam's top coffee exporter the Intimex Group, will benefit from the 2013 harvest. Intimex accounts for a quarter of the country's coffee exports and made $1.2 billion in revenue in 2012.

The amount of non-performing loans or debts in the coffee sector likely to go unpaid stands at 8 trillion dong ($379 million), which is around 60 percent of all loans for the coffee industry in Vietnam. [4]

Production

Arabica in Vietnam

Most coffee producers are private and state owned, such as Trung Nguyen Coffee Company Ltd., Hung Phat Company Ltd., Tam Chau Tea and Coffee Company Ltd., Viet Pacific Co. Ltd. known as Vietcoffee, and Vinacafe (Vietnam National Coffee Corporation). Highlands Coffee, a privately owned producer, was the first private company in Vietnam ever registered to an Overseas Vietnamese. A number of international players, such as Nestlé, have been established in Vietnam following economic liberalization in the 1990s.

In 2010, The New Vision for Agriculture framework was created under the direction of the Minister of Agriculture and Rural Development. This 10-year strategy aimed to advance sustainable, large-scale Agricultural productivity, quality and competitiveness to achieve national food security and sustainable Economic growth. The NVA framework was incorporated into the national agriculture strategy in November 2011 by the Vietnam government. [5]

A Working group on coffee was one of the first initiatives of the Partnership for Sustainable Agriculture in Vietnam.

A number of prominent coffee companies collaborated with government, civil society organizations and farmers as part of a pre-competitive effort to replace aging coffee trees and provide extension and financing services. By the 2014-2015 season, farmer’s yields and net incomes had increased by 21% and 14% respectively. [6]

Vietnam is the second largest producer in the world after Brazil.[7] The quality of the beans, however, has typically limited their marketability. Robusta coffee accounts for 97 per cent of Vietnam's total output, with 1.29 million tonnes exported in 2012, a value of USD 1.4 billion. Arabica production is expected to rise owing to the expansion of growing areas.[8] Other types of coffee grown in Vietnam include Chari (Excelsa) and Catimor.

Region Altitude Harvest season Blend nature
Central Highlands - DakLak, Gia Lai, Kontum, Lam Dong, Buon Me Thuot 500-700m November–April aromatic
Southeast - Dong Nai, Ba Ria–Vung tau, Binh Phuoc
Central Coastal

Style

Vietnamese coffee brewing in single-cup filters. In southern Vietnam, a cup of coffee is often accompanied by a cup of hot or cold tea. In the northern regions, this rarely occurs and the coffee is often twice as expensive.

Vietnamese (Buôn Mê Thuột region) style coffee has characteristics that distinguish it from other coffees and brewing methods:

  1. The growing regions of the Buôn Mê Thuột have been classified into micro-climates by European scientists contracted by private industry. In these different regions, several varieties of coffee are grown, including Arabica, Robusta, Chari (Excelsa), Catimor, and some indigenous varieties of Arabica such as the Arabica SE. Vietnamese coffee producers blend multiple varieties of beans for different flavor characteristics and balance.
  2. Typically the coffee is prepared in single servings in single-cup filter/brewers known as phin. Generally the coffee is served tableside while it is still brewing. The use of sweetened condensed milk rather than fresh milk was first due to its availability and easier storage in a tropical climate. The condensed milk serves to sweeten the coffee as well. Long practice has led to this being the taste preference in the Vietnamese community.
  3. The coffee may be brewed into ice for cafe da, or when had with condensed milk for cafe sua da.

Availability in other countries

In the USA, Vietnamese-style coffee is sometimes confused with that brewed in Louisiana with French roast coffee with chicory. Vietnamese immigrants who came to the state in the late 20th century adopted New Orleans-style coffee because they were unable to get Vietnamese-grown coffee.[9] The French roast style popular in Louisiana was similar to Vietnamese coffee in its relatively coarse grind; therefore it made an excellent substitute for traditional brewing in the single-serving filter/brewer. In Vietnam, however, locally produced coffees are characterized by medium roast and don't contain chicory.[10]

See also

Notes

  1. 1 2 "Vietnam's 2008/2009 Coffee Exports up 15.8 pct". Flexnews. Reuters. September 9, 2009. Archived from the original on 2009-10-01.
  2. ↑ Fortunel Frederic, Le café au Vietnam, harmattan, paris, 2000
  3. ↑ Vietnam coffee industry - learning from the past!
  4. ↑ "Crippling Debts, Bankruptcies Brew Vietnam Coffee Crisis". Voice of America/Reuters. August 14, 2013. Retrieved 2013-08-18.
  5. ↑ "Partnership for Sustainable Agriculture in Vietnam" (PDF). Grow Asia Vietnam. December 2015. Retrieved 2016-07-07.
  6. ↑ "Tackling Global Challenges" (PDF). Harvard Kennedy School CSR Initiative. January 2016. Retrieved 2016-07-07.
  7. ↑ . FAO http://faostat3.fao.org/browse/rankings/countries_by_commodity/E. Retrieved 2014-12-04. Missing or empty |title= (help)
  8. ↑ "US shows interest in VN coffee". Viet Nam News. Vietnam News Service. 2010-06-11. Retrieved 2010-06-18.
  9. ↑ Brault, Len (1999). "True Vietnamese Coffee". INeedCoffee.com. Retrieved 2007-10-09.
  10. ↑ Scofield, Alex (April 2002). "Vietnam: Silent Global Coffee Power". INeedCoffee.com. Retrieved 2006-10-14.
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