Local coffee sector set to capitalise on opportunities from EVFTA
VOV.VN - Vietnam's coffee industry is expected to enjoy tax incentives brought about by the implementation of EU-Vietnam Free Trade Agreement (EVFTA), especially as the EU market accounts for approximately 30% of global coffee consumption.
Most notably, several local businesses have been proactive in investing in growing coffee areas in line with the requirements set by importers.
For example, Vinh Hiep Co., Ltd. based in the central highlands province of Gia Lai, has invested in high-quality growing areas according to the standards set by the US Department of Agriculture, while also installing coffee production lines from Germany in an effort to create a new coffee brand L'amant for the purpose of promoting the export of processed coffee.
Thai Nhu Hiep, chairman of the Board of Directors of Vinh Hiep Co, Ltd., emphasised that investments during the processing stage will help ensure food hygiene, safety, and origin traceability, which are crucial conditions for Vietnamese coffee to win the trust of consumers in the world.
The Vietnam Coffee - Cocoa Association (Vicofa) stated that the EU is currently the second largest export market for Vietnamese coffee, accounting for over 42% of local coffee exports.
Following the EVFTA coming into force in August, Vietnamese coffee products will be able to increase their value in the EU market in the near future due to enjoying import duties of 0%.
Furthermore, Buon Ma Thuot coffee is among the nation’s 39 geographical indications that have been recognised and protected by the EU market, therefore offering a competitive advantage for the domestic coffee businesses compared to other competitors within the EU market.
Nguyen Trung Kien, head of the Department of Market Research and Commodities, acknowledged that many local enterprises have moved to invest in expanding their production scale of processed coffee.
Despite witnessing rapid growth, the export structure of this commodity to the EU still only makes up a small proportion, with major export products being unroasted and decaffeinated coffee.
Despite the export volume of Vietnamese coffee to the EU being large, accounting for over 8.5% of the total imported volume to this market, the current rate of processed coffee remains low at between 5% and 7%, with the most significant items being raw products, according to Vicofa.
Le Thanh Hoa, Deputy Director of the Agricultural Product Processing and Market Development Department, believes local businesses must strive to meet import requirements, ensure food safety standards, and abide by inspecting factories and supervising processing activities.
Moreover, in order to seize upon the opportunities within the EU market, local firms must increase their financial capacity whilst also enhancing the development of brands for Vietnamese coffee globally, according to experts.
