Draft Conditions for Coffee Trading, Export: Tighter Management for Sustainable Development

The Ministry of Agriculture and Rural Development has formally sent a document to the Ministry of Industry and Trade, agreeing that regulations on coffee trading and exporting conditions are urgent and feasible in the current context.

 

According to the draft on coffee trading and exporting conditions compiled by the Ministry of Industry and Trade, the most important conditions coffee companies must satisfy are: exporting at least 5,000 tonnes a year for two consecutive years, having warehouses, being capable of processing at least 5,000 tonnes a year; and having transparent finances.

 

Both Vietnamese and foreign-invested companies are obliged to satisfy these conditions.

 

According to the Vietnam Coffee and Cocoa Association (Vicofa), only 40 percent of companies in Vietnam meet these conditions.

 

While many Vietnamese coffee processors and exporters do not favour this draft ruling, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development are quite adamant. The two ministries also receive strong support from many experts. Mr Doan Trieu Nhan, former chairman of Vicofa, said such conditions should have been applied some years ago. Hence, this option must be drastic at the moment. By doing so, the prestige and position of Vietnamese coffee on the world market will be lifted.

 

At present, Vietnam has more than 150 coffee exporters. An excessive number of participants lead to unhealthy competition in buying and selling, thus staining the prestige and quality of Vietnamese coffee, the Vicofa general secretary said at a polling event in Hanoi last weekend.

 

Vietnam is expected to harvest more than 1 million tonnes of coffee in the 2011 - 2012 crop, equal to the previous year. Coffee exporting prices are forecast to go up in the coming time. In the first nine months of 2011, the country shipped 994,000 tonnes of coffee abroad worth US$2.2 billion, up 8.9 percent in volume and 66.5 percent in value year on year. According to Vicofa, Vietnam is projected to export 1.2 million tonnes of coffee valued at US$2.6 billion in 2011, a record value to date.

 

Branding is also a concern in the draft ruling. The loss of Buon Ma Thuot coffee brand is always mentioned as a hard lesson for the neglect of Vietnamese authorities and businesses towards national brands and properties. Although the case was unearthed in July 2011, after many consultations with legal experts and superior management agencies, the People’s Committee of Dak Lak province authorised the Buon Ma Thuot Coffee Association to stand for a claim for a revocation of protected Buon Mat Thuot coffee brand name in China in mid-October. The association will also represent the province to register for the protection of collective “Buon Ma Thuot coffee” brand name according to the Madrid Agreement Concerning the International Registration of Marks.

 

Although the loss of Buon Mat Thuot coffee brand name has not caused a big impact on Vietnam’s coffee exportation, the claims for this brand and regulations on conditions for coffee trading and exporting are urgent to ensure sustained credibility and brand name of Vietnamese coffee.