VIETNAM TRADE PROMOTION AGENCY

EXPORT PROMOTION CENTRE

======

REPORT ON COFFEE SECTOR IN VIETNAM

(Bo co ngnh hng C ph Vi t Nam)

n v t vn: Trung tm o to- Nghin cu Khoa hc T chc v Qun l a ch: 126/68 Phan K Bnh - Ba nh- H Ni in thoi: 04-7624464; 04-7624911

n v thc hin: Cng ty C phn Truyn thng Quc t IQ a ch: 88 Hng Trng, Qun Hon Kim, H Ni in thoi: 04-8288406

- Hanoi, 2007 -

TABLE OF CONTENTS
I. Overview 2. Overview information of coffee industry II. Production situation 2. Characteristics, classification, and product structure 3. Production scale and capacity 4. Raw materials for production 5. Production trend 6. Major producer 7. Domestic and foreign famous coffee brands III. Domestic consumption 1. Market features 2. Consumption situation 5. Distribution channels IV. Export situation 1. Yield and turnover of export 2. Export market 3. Major exporters 4. Export opportunity and strength V. Import situation 3 3 4 5 5 7 7 8 8 9 9 9 12 13 13 14 18 19 21

VI. Orientation and policies for developing coffee export of Vietnam22 VII. Useful address 24

I. Overview
1. Introduction on the product group mentioned in the report This report mentions mainly coffee species for export of Vietnam, coffee Arabica, Robusta and Chari.

2. Overview information of coffee industry

Vietnam locates in the tropical belt of Northern Hemisphere, where the climate is suitable for developing coffee trees, and brings Vietnamese coffee a very special flavour. Especially in the south, near the equator, hot and wet tropical climate is suitable for Robusta coffee tree, gathering in Tay Nguyen area of which Dac Lac accounts for over 50% of national output. The north with cold winter is suitable for coffee Arabica. Coffee C.Canephora Robusta of Vietnam, which is famous on the world, is a product originating from Robusta species having been selected for decades. Since they are produced concentratedly in good soil with suitable climate high intensive cultivation, especially most of them are planted at altitude of 400 m and over, big amplitude of temperature between day and night, so they not only have high productivity but also good taste fancied by many countries on the world. Vietnamese coffee has been developing fast. The whole nation had 13.000 ha of coffee with the output of over 6.000 tons in 1975, and now approximatedly 500.000 ha with the output of over 700.000 tons. Among Vietnamese agricultural product commodities, coffee plays a quite important role, every year coffee brings export turn-over of over 500 million US dollars, ranking the second after rice.

II. Production situation

1. Production location The area of coffee planting nationwide is 489.000 ha, mostly concentrates in Tay Nguyen areas. The biggest area for coffee raw materials of Vietnam is still Dac Lac province. The whole province has about 311.000 ha basalt soil, which is most suitable for coffee tree to develop, among them planting area is 170.000 ha. This area maily plants coffee Robusta. In the last crop, Dac Lac harvested 432.025 tons, and the expectation of 2007 2008 is 400.000 tons reaching the new quality standard. Dac Nong ranks the second, and Lam Dong third. The matter is for Tay Nguyen provinces, and Dac Lac in particular, how to improve coffee value by cutting Robusta planting area, increasing Arabica one, attaching importance to intensive cultivation, investing processing industry, diversifying ground coffee products. Main coffee planting areas in Vietnam Province Lm ng Gia Lai ng Nai Kon Tum Bnh Ph c kLk Area (ha) 117.918 79.126 28.875 12.984 13.693 237.262 Output (tons) 200.000 100.000 25.000 15.000 15.000 360.000

(Source: Vietnam Coffee and Cocao Asociation) Companies running in the field of producing and processing coffee also concentrate mainly in those areas.

2. Characteristics, classification, and product structure

Vietnamese coffee has main types: Arabica, Robusta, Chari. TCVN 4193:2001 defines ranking coffee according to method of couting faults in a kernel coffee sample. More specific classification can be seen from the table about allowed ratio of mixing other kinds of coffee, as following:

Coffee type

Class Especial and Class 1

Class 2 c l n R=<1% c l n C=<0.5% Mixxing C=<1% And A =<5%

Class 3 and 4 c l n R : =<5% c l n C =<1% Mixxing C=<5% and A=<5%

Arabica

No mixxing R and C

Robusta

Mixxing C:=< 0.5% and A=<3%

(Note: A: Arabica, R: Robusta, C: Chari). At present, coffee output of Vietnam has been mainly Robusta with main processing method of dry processing, harvested coffee is dried by sun power. In years of long lasting rain, in the crop they have to dry them in ovens fired by coal or firewood There have been some companies who process with the wet method. A little output of coffee Arabica has been processed by state-owned companies using wet method. Many companies use colour selecting machine Sortex in the phase of classifying, removing black, brown bean

3. Production scale and capacity

25 years ago, a quarter of century, the matter of developing coffee trees was set up with loud starting steps, mostly in area of 2 provinces of Dak Lak and Gia Lai Kontum in Tay Nguyen. An that time, the whole country only had less than 20.000 ha of low growth and productivity, with output of only about 4.000-5.000 tons. Till now, in the year of 2007, the whole country has over 500.000 ha coffee of strong growth, high productivity, the total output

reaches 800.000 tons. Those figures go far across all thoughts, strategic goals of the industry. Area of coffee in Vietnam started to raise fast in the final half of 1980s in 20th century. Until 1992, world price of coffee dropped at the lowest level since coffee production countries in the world threw their inventory coffee to the market because International Coffee Organization still applied im-export quotas. After 1992, coffee price recovered and gradually reached the top in 1994 and 1995. At this time, everyone from farmers, worker families in TayNguyen to city people from Nha Trang to HCM cities flocked into looking for soil, buying gardens for coffee, resulting in fast increase in coffee output yearly. Vietnam is a top-ranking nation producing and exporting coffee Robusta in the world, in the 2006-2007 crop, the output reached about 17,4 million 60 kg packs of coffee. However, according the Vietnam Cocao and Coffee Asociation, real output could be 21 million packs, increasing 56% compared with 2005-2006 crop. Development of area and output of Vietnam coffee in the past crops Crops Area (ha) 1992 1993 140.000 1993 -1994 150.000 1994 1995 215.000 1995 1996 295.000 1996 1997 350.000 1997 1998 410.000 1998 1999 460.000 1999 2000 520.000 2000 2001 500.000 2001 2002 480.000 2002 - 2003 450.000 2003 2004 2004 - 2005 2005 - 2006 (Source: Vietnam Cocao and Coffee Asociation) Output (tons) 140.400 181.200 211.920 236.280 342.300 413.580 404.206 700.000 900.000 700.000 680.000 948.000 831.000 702.000

With the total planting area has reached over 500.000 ha, and output of over 10million packs each year, at the present coffee ranks the second after rice in the catalogue of Vietnam exporting agricultural products. In order to reach such a high ouput, Vietnam coffee industry attract about 300.000 families, with more than 600.000 labours, especially in 3 months of harvesting, these figures can be 700.000 or 800.000. Thus, the number of labours in coffee industry has reached 1.83% of total labours nationwide in common, and 2.93% of agriculture in particular.

4. Raw materials for production

Raw material coffee for production of Vietnam is harvested from material production areas mentioned above in II.1. Apart from Tay Nguyen, recently, Son La has planned to aim at coffee as the main goal for agriculture development. Son La determines to develop the main tree of coffee till 2010 will reach area of 10.000 ha coffee with the total output of 6.000 tons, assuring for the demand of developing processing industry. This is a promising source of material for the demand of developing Arabica processing industry.

5. Production trend
At the present, the amount of Vietnam exporting coffee to the world market accounts a high rate, but the quality is not high enough, so the export turnover is still low. Many main coffee production areas in Vietnam still aplly old production methods. To maintain the 2nd position in the world of exporting coffee, Vietnam coffee industry will concentrate in improving the quality of coffee products. So, the first task is to care about the quality by improving breed, creating a new variety with high productivity and good quality. Besidesm Vietnam also apllies new technology in production.

6. Major producer
After 1975, in starting production, Vietnam only had a few old processing workshops. In the North, there were some in Dong Giao, Phu Quy, with the equipment since 1960-1962 by Germany. In the South, there were some of old land exploitation like Rossi, Delphante. Together with extending the coffee planting area, Vietnam also began to build new processing workshops, from separate equipment to production chains copying the Hang-xa sample of Hai PHong 1/5 Mechanic Factory, A74 Factory in HCM City. In recent years, mnay companies have built new processing factories with equipment imported from Germany, Brazil. Processing agents with new equipment, good quality have been built in recent five and 7 years assure to process from 150.000 to 200.000 tons export coffee. Besides, there are many uncompleted reprocessing agents with many separate machines, processing of preliminary treatment bought from civilians in order to assure export standard.

7. Domestic and foreign famous coffee brands

Vietnamese coffee are widely known by domestic and foreign consumers thanks to best brands including Vinacafe, Trung Nguyen, Thu Ha, Bao Loc, Buon Ma Thuot, etc. Thu Ha Coffee is the brand proceeded by former Dinh Dien brand which existed before 1975. Other best known brands are also finding ways to improve its coffee quality by applying new advanced technologies. These brands owners have marketed instant coffee made by Moka and Robusta or coffee products with flower favors, etc.

III. Domestic consumption

1. Market features
Although this is a big market with huge population, the demand on coffee products is still limited. Vietnamese coffee products are made mostly to be exported.

2. Consumption situation
The average amount of coffee that Vietnamese people consume each year is 0.5 kg per one. Recent reports of World Bank show that with its potential, Vietnams market may consume 70,000 tons per year. It means that this market can consume 10% of the amount harvested each year which is 700,000 -800,000 tons. Meanwhile, according to the World Coffee Association, Vietnams domestic consumption is now nearly 3.6% which is the lowest in the group of coffee producers. This difference is bigger if compared to the amount consumed by the members of the World Coffee Association which is 25.16%. Coffee beans of Vietnam are mostly produced for exportation. Like many other industries such as aquatic or farm products, coffee producers are more interested in producing for exportation than domestic consumption.. A new way of Vietnams coffee producers is investing in a production line of ground and instant coffee to meet the demand of the domestic taste but the result is still limited. 3. Consumption trend Among the Vietnamese young people, the trend of drinking instant coffee is more and more popular to meet the demand of the modern life. Instant coffee becomes the main trend of consumption so it has different tastes and meets different demands very well. However, the investment in producing instant coffee requires a huge ammount of caapital and cost of technique transferring, which troubles small and medium enterprises. As a

result, they still focus on producing and exporting coffee beans or ground coffee and skip the domestic market. The too high rate of exported coffee at this time has put a pressure of exporting market for Vietnamese coffee, especially when the exporting market have problems, Vietnams coffee industry may easily go into an overproduction and suffer from big disadvantage in prices. Therefore, Vietnam intends to encourage domestic consumption. The amount consumed in 2010 which is estimated to double the current amount and accounts for 20% of the production may be able to limit the pressure. 4. Price The coffee prices in 2007 has fluctuated extraordinarily. Average FOB price in Vietnam in the first 3 months is 1417 USD per ton, much higher than that of the last year which was 289 USD per ton. The amount of cofee exported has a sharp and extraordinary rise in the first 3 months of the year reaching 494,000 tons, 228,000 tons higher than the same period of the last year. This is also the reason why the price declined in March. In the first 6 months of 2007, the price of coffee in Vietnam rose very quickly and followed closely to the world market. The average FOB price in Hochiminh city declined by 53USD per ton in March and rose again in April, and in June reached the average of 1802 USD per ton, rised by 177 USD per ton compared to the previous month and 326 USD per ton compared to April 2007. The defference between the domestic and the world price decreased from 200 to 100 USD per ton. The price of rough coffee beans (c ph nhn x) in Vietnam in June 2007 rised 10% than May which is 2,530 VND per kg, reaching 28,171 VND per kg. In August 2007, the pice in Vietnam delined sharply to 1,679 USD per ton, 132 USD and 7.3% lower than the average price of the previous month ( the reason is that the timed price of robusta coffee is declined due to the fluctuation in the world financial market). But in September, the price

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continued to rise and the average price reached 1,739 USD per ton, rising 50USD per ton compared to the August. At the end of November 2007, the export pice of robusta range II of Vietnam continued to rise slightly , fluctuating in the range of 1,650 to 1,685 USD per ton, decreasing about 200 USD compared to the middle of Nov, but still 23% higher than the same period of the last year. The price of coffee beans also falls to 26,400 VND per kg, 200VND lower than in the middle Nov but still 5000 VND higher than the same period of last year. At the beginning of December 2007, the price of robusta range II of Vietnam continues to slightly decrease, fluctuating from 1615 to 1625 USD per ton, 2.12% lower than the end of Nov 2007. The domestic price of coffee beans fluctuates from 26200 to 26400 VND per kg. Therefore, the price of Vietnamese coffee is still 50-70 USD per ton lower than other coffee producing countries (the reason is that the trading doesnot comply with the international standard)

Vietnamese coffe export price in October 2007

(Source: Daktra)

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5. Distribution channels
To meet the domestic demand, Vietnamese producers can distribute directly via big super markets or retail shops or open their own coffee bars Expanding marketing and domestic consumption channels by serving the demand of drinking instant coffee is now one of the ways chosen by some producers in Vietnam. Besides Trung Nguyen coffee bar chain, a number of brands like Highland, Phuc Ban Me, Buon Me Thuot coffee are opening their own coffee bars in big cities like Hochiminh city, Can Tho, Quy Nhon, This is aimed to market and introduce their products rather than to ger high revenues.

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IV. Export situation

1. Yield and turnover of export
In recent years, Vietnamese coffee industry has had rapid developments. In 2000, the exporting amount of Vietnamese coffee reached 874,676 tons with the turn over of 263,259 thousand USD. In the crop of 2006-2007, Vietnam exporting amount is 1.28 million tons with the turnover of 1.899 billion USD, rising by 40.45% in number and 94.19% in value compared to the same period of the last year. Kinds of Vietnamese coffee exports in the crop 2005-2006 Kind Beans Instant Others Total Production(tons) 785,146,773 869,705 8,890 786,025,368 Turnover (USD) 837,771,354 2,770,341 92,996 840,634,691

No 1 2 3

( Source : Department of Customs ) In September 2007, export coffee of Vietnam reached 38,13 thousand tons valued USE 65,93 million, reducing 10% in term of quantity and 12,46% in term of value compared with that in August 2007 (yield of export coffee in August 2007 reached 41,943 thousand ton valued US$ 74,145) reducing 20,46% in term of quantity and increasing 6,95% in term of value compared with that at the same time with that in 2006. In October, Vietnam export coffee reached 972,65 thousand ton valued US$ 1,467, increasing 44,58% in term of quantity and 86,71% in term of value compared with October 2006 (reached 539,042 thousand ton valued 0,21% ). By October 2007, export turnover of coffee was at top of Vietnam export agricultural products. Vietnam is at the second position in the world ranking in term of export yield of coffee kernel to the world market.

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Estimated in 2007, the whole country exported 900.000 ton of coffee with turnover reaching 1,5 million USD; of which coffee in Dak Lak covering more than 50% of yield. Annual crop in 2006- 2007, yield of coffee in Dak Lak harvested was 435.000 ton kernel coffee. For the first nine months of 2007, Dak Lak has exported with turnover of 479 million USD.

2. Export market
Within 2005-2006 period, Vietnam exported Kernel coffee into 71 countries in the regions. Export market has been expanded not only in Europe and America, but also Middle East, Africa, some countries in ASEAN Association and Middle America. Top ten countries import Vietnam coffee are German, USA, Spain, Italy, Belgium, Poland, France, Korea, Britain, and Japan, which import 3/4 exported coffee amount of Vietnam. In 2006, the biggest markets for Vietnam Coffee is German market, accounting for 15% total annual export output, then USA, Spain with 11% and lastly Japan, Korea, and Poland.

Markets of Vietnamese coffe export price in 2006

Th trng xut khu c ph ca Vit Nam 2006
15%

c
39% 11%

Ty Ban Nha M Italia Ba Lan

11%

Hn Qu c Nh t B n Anh Cc n c khc

3% 4% 5% 5%

7%

(Source: Vietnam Customs)

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Some major import markets of Vietnam in some months in 2007 as follows: Germany market: Germany is the biggest import market of Vietnam. In March, 2007 Germany import reached 25,968 tons with the value of USD 37,140,603 and in three month earlier of 2007 Germany import reached 70,287 tons with the value of USD 102,553,942. In September 2007 Germany imported 4,731 tons with the value of USD 8,163,052 and in the nine months earlier of 2007 Germany imported 138,568 tons from Vietnam with the value of USD 211,034,414. USA is the biggest agricultural products market in the world and at the same time is major coffee import market in the world. It is estimated that in 10 years demand for import of the United States will increase 10% a year and the amount of coffee imported will increase by each year. Specifically, for the period 2005 2006 the United States imported 192 tons of instant coffee from Vietnam, accounting for 22% of total export amount of 829.7 tons and by March 2007 the United States imported 15,660 tons from Vietnam with the value of USD 22,608,078. In the three months earlier of 2007 the United States imported 56,016 tons from Vietnam with the value of USD 80,778,659. By nine months earlier of 2007, the United States imported 100,167 tons of coffee from Vietnam with the value of USD 151,823,721, increasing 40% in compared with three months earlier of 2007. According to assessment of Vietnam commercial affairs in the United States, by 2010, the amount of coffee of Vietnam exporting to USA will face abnormal changes. In case of competitive price and good quality, Vietnam can export to USA market with average growth of 10 15% and the export turnover to this market can reach the value of USD 350 million in 2010. Spain is also the major coffee export market of Vietnam. At the present, demand for coffee consumption in this market is relatively high. Therefore, import output of this market

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accounts for 11% of total volume of coffee export of Vietnam. In march 2007 Spain imported 12,375 tons coffee from Vietnam with the value of USD 18,257,866 and in three months earlier of 2007 Spain imported 33,386 tons from Vietnam with the value of USD 49,187,793. England is the biggest market for coffee import. The demand for coffee consumption in this market is relatively high. The amount of coffee imported to this market increases by each year. At this time, England is the main export market for Vietnam coffee and ranks 9th among the country importing coffee from Vietnam. According to statistics, in march 2007, England imported 21,729 tons of coffee from Vietnam with the value of USD 30,742,361 and the total coffee import of England in nine months earlier of 2007 reaches 27,992 tons with the value of USD 40,654,142. Coffee import situation to Korea market is strongly promoted. Demand for coffee consumption in this market is high. In the recent years, amount of coffee imported to this market has faced abnormal changes and declined dramatically. However, import amount has improved considerably. In 2004, Korea imported 35,000 tons of coffee from Vietnam with the value of USD 35,883. By the nine months earlier in 2007, Korea has imported 22,446 tons coffee from Vietnam with the value of USD 11,453,615. At the present, Korea is ranking 8th among the coffee importing markets from Vietnam and is one of stable importing markets of Vietnam. The volume and coffee import turnover from Vietnam of this country is increasing. Coffee exporting market in march and three months earlier of 2007 Three months of 2007

Name of country

unit

March,2007

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amount India England Swiss Poland Belgium Portugal UAE Canada Taiwan Denmark Germany Estonia Holland Korea Hong Kong Hungary Greek Indonesia Italy Malaysia USA South Africa new Zealand Russia Japan Australia Finland France Philippine Zech republic Singapore Slovenia ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton ton 852 4.47 206 2.369 4.795 953 991 909 106 376 25.982 5.027 3.823 73 216 484 14.96 12.63 2.51 15.66 398 96 3.073 6.47 1.705 3.202 1.861 84 1.948 826

value (USD) 1.083.272 6.448.636 344.976 3.438.455 7.149.106 1.490.983 1.373.694 1.353.871 163.045 532.644 37.140.603 7.355.389 5.430.993 114.048 222.371 728.082 21.615.845 18.908.082 3.666.046 22.608.078 523.979 141.6 4.428.280 9.789.756 2.449.597 4.645.974 2.537.533 113.337 2.593.63 1.239.312

amount 1.161 21.729 262 8.942 18.501 1.986 1.336 1.865 262 886 70.287 384 13.753 8.13 217 709 1.378 26.389 42.562 5.841 56.016 2.404 480 7.851 14.514 4.988 292 11.876 3.346 336 4.143 2.362

value (USD) 1.400.935 30.742.361 434.832 12.849.838 27.167.482 3.096.142 1.908.537 2.745.036 427.894 1.274.308 102.553.942 525.971 20.215.900 11.453.615 328.789 959.554 2.055.205 38.048.390 63.027.692 8.304.248 80.778.659 3.349.444 680.64 11.368.938 21.906.011 7.048.865 421.921 16.819.751 4.710.534 474.876 5.536.231 3.529.362

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Spain Swedish Swiss china

ton ton ton ton

12.375 315 12.678 1.344

18.257.866 465.36 17.105.248 1.989.313

33.836 672 55.194 3.542

49.187.793 992.544 76.678.568 4.990.411

(Source: Vinanet)

3. Major exporters
In the year 2005/06, there are 124 enterprises participating in coffee export all over the country in which 52 enterprises are members of Vietnam Association of coffee and cocoa, accounting for 41.9%. Member enterprises have exported 595,673 tons with the turnover of USD 637,033,155, accounting for 75.95% market share. Besides, other three connecting members which are Dakman, Neumann, Gruppe takes part in coffee exporting market with export amount of 113,104 tons and the value of USD 128,120,954, accounting for 14.27% market share. It is noticeable here that these connecting members have exported with higher unit price and achieved USD 1130 per ton in comparison with other members with USD 1070 per ton, exceeding 5.6%. 68 enterprises which are not members take part in exporting. These enterprises have exported 84,341 tons with the value of USD 88,816,190, accounting for 10.64% of market share. Vietnam enterprises popularly sell coffee with back subtraction, later stopped price method. This is a kind of price speculation and they have to face a lot of risk. At the same time, transaction price changes by day, minute, second requiring the horse-trading of the transactor as the value of each lot of goods is great which can make the enterprise suffer from losses and even bankruptcy. Now there is one company in Vietnam which is Trung Nguyen Coffee Company is given certificate on good agriculture practice and coffee quality. Trung Nguyen becomes the only Vietnam Company given the Eurep certificate. At the mean time this company has operated a factory processing instant coffee G7 in the Tan Dong Hiep A industrial zone (Binh

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Duong) with the capacity of 3,000 tons a year and the total investing capital of USD 10 billion. VINACAFE General Corporation is the state-owned company with 100% state capital and is the biggest member of Vietnam Association of cocoa and coffee. This enterprise has 70 companies and plantations. Annually, VINACAFE exports a large number of coffee accounting for 20 25% coffee output of the whole country.

4. Export opportunity and strength

Supply source of coffee is big and regularly distributed within the year. Vietnam is now ranking second among the coffee producing countries. The supply to the market is considerable. Vietnam can distribute about 600,000 700,000 tons of coffee each year. Natural condition: Vietnam has many advantages; the soil and climate are suitable for the growth of coffee. Thanks to natural condition, Dak Lak has developed coffee with remarkable rate. Before 1975, Dak Lak had about 12000 hectares of coffee however this area has increased to 174000 hectares in the whole province in earlier 2007. at the present, area for coffee growing is 489,000 hectares all over the country.

Abundant workforces: Agricultural workforce in Vietnam is crowding, and Vietnam farmers are industrious and experienced in coffee cultivation and accessible to advanced production and processing technology in the world. International cooperation opportunities: Some coffee exporters such as Indonesia and Malaysia have offered to cooperate with Vietnam to bring benefit to coffee producers and export enterprises. Coffee Cultural Week in 2007 is an activity following Coffee Festival held in Buon Me Thuot in 2005 and an intermediate step to prepare for Coffee Year with Coffee Festival hold in Buon Ma Thuot by 2008. The Coffee Cultrual Week is organized with compact images representing information

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on Vietnam coffee sector. There will be more than 30 inland famous coffee brand names and several outland enterprises at the fair. This will create opportunity to promote Vietnam coffe enterprises to foreign countries and to facilitate the cooperation between Vietnam and developed countries to boost the stable development of coffee sector.

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V. Import situation
Vietnam produces approximately 100, 000 tons of coffee every year. There are many domestic coffee supply sources, especially Rubusta coffee. This explains why coffee is rarely exported into Vietnam. Arabica and dissolvable coffee are mostly imported.

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VI. Orientation and policies for developing coffee export of Vietnam

Vietnam has adjusted its orientation and strategy in following contents: Moving structure of trees, identifying strategic target for the branch. Reducing production price and enhancing business effect. Manufacturing and providing many kinds of goods for market except multiplication coffee in order to meet requirements of consumers. Manufacturing goods with high quality such as organic coffee, special coffee etc. Innovating purchase relationship, expanding market for Vietnam coffee trees, interest towards local market. Reducing coffee area, only retaining suitable areas based on research inspection process and planning for coffee trees. Having plans and directions of changing structure of tree growth for unsuitable coffee areas to suitable other trees, which brings economic and environement effetiveness. Constructing mechanism of suitable coffee gender; apart from typical coffee, it also needs to develop other coffees such as tea cioffee, jackfruit coffee etc Strengthening construction of infrastructure, innovation of technological equipments, establishing price policies in product purchase with the principle of high quality, high price bargain, low price bargain for low quality, evenly without purchase. Constructing organization system to guarantee for brand name to appear in local and foreign market. Expanding kinds of coffees not only multiplication coffee but also improvement of soluble coffee etc. Strengthening, synchronously dealing with plan of implementation, particularly in organization in order to create firm coffee production. Expanding market for Vietnam coffee trees in foreign countries, promoting coffee consumption at local market. Development of Arabica coffee trees at places which have enough self-intensive farming conditions, area reaches about 1.000 ha; output from 3.000 - 4.000 tons goods and private brand name.

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Constructing soluble coffee processing plant with capacity of 500 tons/year to provide for local market and export. Development of strong coffee production industry in Vietnam.

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VII. Useful address

Vietnam Coffee and Cocoa Association (VICOFA) No135A Pasteur, Ward 6, district 3, Hochiminh city Tel: (84-8) 8231513/ 8231520 Fax : (84-8) 8231511 Email: vicofahcm@vnn.vn Website: http://www.vicofa.org.vn Ministry of Agricultural and Rural Development (MARD) http://www.mard.gov.vn

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