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Coffee industry targets $6 billion export value in 2030

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The coffee export value in December, 2021 increased by 26.2 per cent compared to November, 2021. Photo kinhtedothi.vn

Tố Như

HÀ NỘI — The Việt Nam Coffee and Cocoa Association has targeted a coffee export turnover of US$5-6 billion in 2030, doubling the export value at present.

To reach this figure, experts believe that the domestic coffee industry needs to increase the proportion of processed coffee products from less than 10 per cent at present to about 25 per cent or even more.

However, increasing the proportion of processed coffee products is a big challenge for the industry due to the level of technology, complex factory operation and awareness of farmers.

At present, Việt Nam has 160 coffee roasting facilities, 11 coffee blending facilities and eight instant-coffee processing facilities. The number of instant-coffee processing facilities is small and most of them are operating below their designed capacity.

On the other hand, Việt Nam’s processed coffee brands still have no place in the world market, and branding takes a lot of money and effort.

Deputy Minister of Industry and Trade Đỗ Thắng Hải said that to gain the target of $6 billion, Việt Nam’s coffee industry needed to strengthen connection between production and trade, expand export markets and develop products associated with brand building, towards building a sustainable coffee value chain.

According to the Minister of Agriculture and Rural Development Lê Minh Hoan, if the coffee industry wants to have sustainable development, there must be linkages among provinces or economic regions to form a larger-scale production area and build a brand for Tây Nguyên coffee.

The Ministry of Agriculture and Rural Development (MARD) will continue to implement projects on sustainable development for the domestic coffee industry.

For the Central Highlands provinces, the ministry will set up logistics infrastructure for the coffee industry to create higher coffee value and more processed products. This will form a coffee production chain to increase value of coffee beans and income for coffee producers.

“The Europe-Việt Nam Free Trade Agreement (EVFTA) has opened up great opportunities for the domestic coffee industry. In the future, the ministry will develop its projects on exporting agricultural products to the EU, including coffee. At the same time, it will also have a strategy for Vietnamese agricultural products to enter large distribution systems in Europe,” Hoan said.

“If Central Highlands coffee wants to reach out to the world market, it needs to change production, harvesting and processing in accordance with climate change and green consumption of the world market.” 

The coffee industry needs to restructure effectively, including building a specialised cultivation area associated with the development of coffee processing; and application of advanced technology.

It need to promote linkage of raw material areas with processing facilities to create a stable supply of quality goods, meeting the requirements of the market.

The industry must have solutions to remove difficulties and support for farmers and businesses in attracting investment; apply science and technology for production; and improve quality of human resources.

In addition, branding must be paid more attention to. Now, the building and developing of brands have not been realised and effectively implemented by businesses. This is one reason why Việt Nam’s agricultural produce, including coffee, are unknown on the world market.

The local enterprises need to survey terms of market share, taste, quality, and price. They must determine the proportion of processed products to build a clear development direction, advertising, marketing and brand positioning strategies.

The State will support enterprises to build and develop their brands through campaigns on communication and image promotion, and training programmes on improving design ability.

Export in 2022

The global coffee price in 2022 is forecast to remain high. The COVID-19 pandemic has limited supply from major coffee producing countries such as Colombia and some other South American countries, according to the association. Congestion at international ports is also predicted to be prolonged.

Currently, some roasters plan to mix Arabica and Robusta coffee to lower the selling price due to the lack of Arabica coffee supply.

In the long term, this can change consumer tastes and make customers more accustomed to drinking Robusta coffee, and help Việt Nam increase Robusta coffee exports.

Meanwhile, European, American and Asian consumers will also gradually know and like Vietnamese coffee beans.

Experts said that if local enterprises have strategies to enter strict export markets such as the EU, the US and Japan, they will be promising markets for Vietnamese coffee exports.

The coffee industry’s strategy in the future is to develop processed coffee products, such as roasted coffee and instant coffee, rather than focusing on the export quantity of green coffee as at present.

According to the experts, despite many challenges, developing the coffee processing industry will be a key solution not only to increase export value but also to help the coffee industry have sustainable development.

Deputy Minister of Industry and Trade Hải said that in recent years, trade promotion activities had been enhanced to develop the export market for coffee products.

Under the National Trade Promotion Programme, the Ministry of Industry and Trade (MoIT) has coordinated with localities producing coffee, organisations and enterprises to implement trade promotion activities, such as participation in specialised exhibition of agricultural produce and food at home and abroad.

In 2021, Việt Nam’s coffee exports reached 1.52 million tonnes, worth of about $3 billion, down 2.7 per cent in volume, but up 9.4 per cent in value year on year. Last year, Việt Nam mainly exported Robusta coffee.

According to the MoIT’s Import and Export Department, loosening social distancing measures due to COVID-19 has created more favourable conditions for customs clearance, and higher coffee demand on the world market, which were the factors to make Việt Nam’s coffee exports recover at the end of 2021.

The coffee exports in December 2021 reached 130,000 tonnes, earning $305 million, up 21 per cent in volume and 26.2 per cent in value compared to November 2021.

The average export price of Việt Nam’s coffee in December 2021 reached $2,344 per tonne, the highest level since June 2017. The price increased by 4.3 per cent month-month and 28.7 per cent year-on-year.

The average export price for the whole of 2021 was estimated at $1,969 per tonne, up 12.4 per cent compared to 2020.

However, to increase the export turnover, the core factor is still the development of processed coffee products. In 2021, Việt Nam’s deep-processed coffee exports were only 121,000 tonnes, earning $433 million. Thus, the volume only accounted for 8 per cent, while the export turnover of processed coffee products accounted for 15 per cent of the total turnover. —

Source: https://vietnamnews.vn/economy/1113999/coffee-industry-targets-6-billion-export-value-in-2030.html

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HCM City growth remains an X factor: foreign investors

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HCM City Chairman Phan Văn Mãi (second from left) speaks with representatives of businesses on the sidelines of a conference between city leaders and foreign investors last Friday. — VNA/ Photo

HCM CITY — Rising labour and production costs have prompted some relocation but HCM City remains an appealing investment destination given its market size and speedy recovery, experts say.

Speaking at a meeting between city leaders and foreign investors late last week, Hirai Shinji, chief representative of the Japan External Trade Organisation (JETRO) in HCM City, said while more manufacturers were looking to relocate their production to other provinces because of rising labour costs and land rents in HCM City, the city remained a popular investment destination.

A recent JETRO survey attributed it to the city’s great economic growth potential and market size, he said. 

HCM City has been praised for its achievements in speedy post-pandemic economic recovery, he added. 

Mary Tarnowka, executive director of the American Chamber of Commerce in Vietnam (AmCham Vietnam), said: “We continue to see a lot of interest from the US business community in the country, especially HCM City. 

“Investors are looking for a fair, transparent, predictable regulatory environment that values innovation.” 

The city should continue to attract investment into high-value manufacturing, develop the service economy, especially the digital economy, as well as financial services and healthcare, she said.

It is also critical that the city builds a “complete” infrastructure for sustainable growth and train a workforce that is globally competitive, she added.

The recently launched direct flight service between HCM City and San Francisco will help promote bilateral trade and investment between Việt Nam and the US. 

Allowing international tourism to resume will not only boost the local industry but also help speed up economic recovery, she said, reiterating that AmCham and its members are optimistic about the future here. 

According to the Foreign Investment Agency, as of February 20, 2022, the US ranked 11th among 140 countries and territories investing in Việt Nam, with 1,145 projects worth over US$10.3 billion. 

Traffic infrastructure 

Jean Jacques Bouflet, vice president of the European Chamber of Commerce (EuroCham), recommended that the city improve its traffic infrastructure to enhance connection with surrounding localities. 

He also said that “the fees for seaport infrastructure service in the city, applied from April 1, remain too high, worsening the cost burden, thus reducing the city’s competitiveness.” 

Bouflet suggested that all city agencies, particularly its Department of Industry and Trade, use digital signatures for all administrative documents and processes. 

Currently, not all processes are allowed to use digital signatures, though they have the same legal value in signing documents related to import-export activities and customs, he said.

The city should also develop policies to promote a green and energy-saving economy, he said, urging it to complete its socio-economic development plan for the 2021-30 period (with vision until 2045).

It needs to improve its investment environment further by upgrading infrastructure, reforming administrative procedures and applying new technologies to speed up digital transformation, Bouflet said. 

Phan Văn Mãi, chairman of the People’s Committee, said the city was committed to promptly resolving all problems faced by businesses and investors.

“It will continue to improve its business climate, streamline administrative procedures and speed up digital transformation to build a digital government and digital economy.” 

From June, the city will use a digital platform to connect with foreign investors and regularly organise online meetings to call for investment, he added.

HCM City attracted $1.28 billion worth of foreign investment in the first four months of this year, up 12.2 per cent year-on-year, according to the Department of Planning and Investment. —  

Source: https://vietnamnews.vn/economy/1194076/hcm-city-growth-remains-an-x-factor-foreign-investors.html

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Upgrading the market for the sake of all participants

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An employee passes electronic boards showing share prices inside Hồ Chí Minh Stock Exchange in HCM City. — VNA/ Photo Hữu Khoa

HÀ NỘI — An upgrade to emerging status will not only help the stock market develop quickly, transparently and sustainably, but also attract huge foreign capital inflows, said experts. 

Recently, the Government has directed to purge the market and improve the trading system’s capacity, showing its determination to enhance the quality of the stock market.

The refinement is to protect investors and open a door for the Vietnamese stock market to be upgraded from a frontier to an emerging market.

Prime Minister Phạm Minh Chính has taken an interest in the development of the capital market and the stock market, including the matter of upgrading the market. 

During a trip to attend the ASEAN-US Special Summit, on May 16, the PM visited the New York Stock Exchange (NYSE) – the largest stock exchange in the world – hoping it supports and shares experience to develop an effective and sustainable stock market in Việt Nam, and successfully build a regional financial centre. 

PM Chính also expected the NYSE and its Vietnamese partners to foster a sustainable, mutually beneficial partnership, contributing to making the Việt Nam-US comprehensive partnership more substantive and effective.

On the occasion, PM Chính witnessed the awarding ceremony of two cooperation documents in the fields of finance, banking and investment funds between Vietnamese and US partners, including a cooperation document between the Vietnamese State Securities Commission (SSC) and the NYSE regarding support to upgrade the country’s stock market and build a mechanism for investors to participate in both stock markets.

Previously, the PM chaired a conference on developing a safe, transparent, efficient and sustainable capital market to stabilise the macro-economy and ensure major balances of the economy.

At the conference, PM Chính also asked the Ministry of Finance to immediately solve the order congestion situation and invest in technological innovation and digital technology application, while urgently implementing measures to upgrade the market from frontier to emerging status to attract investment capital, especially foreign investment.

Dominic Scriven, head of the Việt Nam Business Forum’s (VBF) Capital Markets Working Group, said that the move to purify the market is a great effort and determination from the Government.

As the goal is to build and develop a safe, transparent and sustainable securities market, cleansing the market will ensure the interests of businesses and genuine investors, increase the stock market’s appeal, and attract more investment capital flows both at home and abroad.

Meanwhile, Phạm Lưu Hưng, chief economist of SSI Securities Company (SSI), said that the move to purge the market in recent years raised expectations that the upgrade process will be easier. Hưng hoped that in the next assessment, the Market Rating Organization (MSCI) will note some positive comments about what Việt Nam has done.

According to Minister of Finance Hồ Đức Phớc, the ministry is currently working with international organisations to deploy solutions to upgrade the stock market by 2025 as per the set roadmap.

Huge foreign capital inflows

Analysts believe that the upgrade from frontier to emerging status will be an important driving force for the market.

Zafer Mustafaoglu, World Bank (WB) Practice Manager for Finance, Competitiveness and Innovation (FCI) for East Asia and Pacific, said that the capital market development is a long-term effort, and there is still much work to be done in Việt Nam.

Upgrading to emerging market status is not only an improvement in position, but also signals strong enhancement in quality with a solid market foundation.

Upgrading to an emerging market also attracts the attention of high-ranking international investors to Việt Nam. In the stock market, upgrading to an emerging market could result in an additional US$10 billion in new investment for the country. The first year alone can receive an additional $2-5 billion.

According to Nguyễn Minh Tuần, General Director of AFA Capital Investment JSC, the criteria for upgrading from frontier to emerging status focus on two main factors – size and liquidity of the market (quantitative) and market access (qualitative).

In terms of size and liquidity, there are four criteria which are the number of companies included in the Standard Index, total market capitalisation, floating capitalisation and market liquidity. Việt Nam has almost met three standards, he said. 

The main issue is qualitative standards. In the latest ranking in June 2021, there are nine criteria that the country has not yet met, including the ownership rate, ownership restrictions and equal rights of foreign investors.

Source: https://vietnamnews.vn/economy/1194077/upgrading-the-market-for-the-sake-of-all-participants.html

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EVN accelerating projects to gear up for hot season

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EVN workers checks electricity equipment. — VNA/  Photo

HÀ NỘI — Vietnam Electricity (EVN) said it is accelerating power generation and grid projects, especially urgent infrastructure, to ensure supplies in the hot season.

The State-owned group said in the first four months of 2022, the firm and its subsidiaries had started work on 30 projects and put into use 31 grid facilities between 110kV – 500kV.

It cited meteorological forecasting centres as saying that heatwaves this year are likely to appear in the northern and central regions later than usual, but won’t be too severe.

Power demand in the north is unlikely to rise sharply in May, and daily consumption will be around 805 million kWh.

EVN noted that this month, it is working to guarantee supply for production and business activities as well as daily life, especially the 31st Southeast Asian Games (SEA Games 31) and the 15th National Assembly’s third session.

It is maintaining high water levels at multi-purpose hydropower plants in the north, operating thermal power plants in the region, and importing about 540MW of electricity in May.

Its subsidiaries were also requested to ensure power supply in the dry season, ready manpower and equipment for any possible incidents due to natural disasters, and recommend people, agencies and factories use electricity in a safe and economical manner.

In April, the entire EVN system produced 22.62 billion kWh of electricity, up 1.9 per cent year-on-year. That added up to a four-month figure of 85.65 billion kWh, increasing 6.2 per cent. —

Source: https://vietnamnews.vn/economy/1194045/evn-accelerating-projects-to-gear-up-for-hot-season.html

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