Export Of Coffee In Vietnam Economics Essay

Vietnam has risen to be in the top states of the universe in the production of a assortment of agricultural merchandises, led by rice, java, and followed by Piper nigrum, gum elastic, Anacardium occidentale, gum elastic, etc. Besides, there are besides the rich potency of medicinaland rare production of tropical woods, rivers, mangrove countries, and over 3000 kilometer of coastal warm H2O and many sorts of seafood. Coffee is considered to be the most typical agricultural merchandise in the procedure of heading out to the universe of Vietnam ‘s economic system. Vietnam approached with java recently in comparing to other states ( to be commercialized in twentieth century ) , and java were planted in limited countries merely at that clip. Nowadays, the java turning countries have been expanded to about half a million hectares. Vietnam ‘s export of java has met many successes and our state has besides been regarded as one of universe ‘s prima java exporters. However, Vietnam ‘s java industry still has to confront many troubles and challenges from both domestic and foreign. This study, with the intent of supplying information for readers to see a large image on the export of java in our state, is divided into three chief parts. The first portion discusses the state of affairs of Vietnam ‘s java production and export. The 2nd portion trades with the place of Vietnam ‘s java on the international market. The last portion indicates the future way of Vietnam ‘s java industries to hike our state ‘s economic system.

Discussion of findings

The state of affairs of production and export of java in Vietnam

In recent old ages, java is one of the most of import agricultural export trade goods of Vietnam, with an one-year income of 400 to 600 million USD. Therefore, it plays a important function towards the national economic system, brings more foreign currency for the state. Besides, bring forthing and exporting java contribute significantly to beef uping and developing the trade and economic dealingss between Vietnam and other states.

Vietnamese java is presently available on every continent such as North America, Western Europe, Eastern Europe, Australia, South Asia, North Asia, and in more than 80 states such as U.S, Japan and Europe ( Germany, Italy, and Belgium ) , etc. In add-on to this, the quality of Vietnamese java is besides recognized and extremely appreciated by international market.

The State ever considered java as one of the major export points of agribusiness in peculiar and our state in general. After the national release in 1975, the country of java has increased from a few 10s of 1000s to about 300 1000 hectares. This creates a strong foundation for the growing of export java. Furthermore, in Vietnam, the sum of java is really big and possible ; nevertheless most of them are non exploited expeditiously. Therefore, the java industry needs to hold specific solutions to maximise this potency.

a. The production:

Coffee was introduced to Vietnam for a long clip and has been commercialized since 1888. Because of climatic conditions and suited land, it has been developing on a big graduated table, and making good quality seeds that are similar to the merchandises of other big manufacturers and exporters of java over the universe. Harmonizing to the General Statistics Office and the java industry, the production was increasing from twelvemonth to twelvemonth:

Table 1: The country and production of java in Vietnam over the periods

Time period of clip

Area

End product

1997 – 1998

295,000

410,530

2000 – 2001

300,000

465,800

2001 – 2002

305,000

481,070

In recent old ages, java is being expanded country in Tay Nguyen, Dong Nam Bo, etc, which are the parts chiefly seting Robusta java. Additionally, Arabica java is besides developed in several states such as Son La, Lai Chau, Yen Bai, Ha Giang, Tuyen Quang.

B. The export:

As a consequence of increasing the production, the export of java besides is heightening yearly in both measure and quality. Besides, the mean export monetary values have been lifting significantly, despite the alterations of international java market. However, the sum of foreign currency decreased 100s of 1000000s of dollars.

Table 2: The production and the turnover of java export in Vietnam over the old ages

Time period of clip

Export measure ( dozenss )

The growing rates

Employee turnover ( million USD )

The growing rates of turnover compared with the old harvest

1999 – 2000

2,261,006

462 %

3,011

399.3 %

2000 – 2001

3,953,700

74.8 %

9,212

205.9 %

2001 – 2002

1,400,285

-64.5 %

3,785

-58.9 %

The place of Vietnamese java in the international sphere

Harmonizing to the latest study of the International Coffee Organization ( ICO ) , Vietnam has merely overcome Brazil to go the largest java exporter in the universe. In 1997, Vietnam was in the top four of the largest java exporting states, along with Brazil, Colombia and Mexico ; surprisingly, after 15 old ages, Viet Nam has been ranked figure one in the universe.

In the first six months of this twelvemonth, Vietnam has exported 2.5 billion dollars of java, turning by 25 % compared to the same period last twelvemonth, and more than 13 % of Brazil. This leads Vietnam to acquiring the figure one of the universe ‘s java exporter, which ever belonged to Brazil over the past decennary. The rush of java was evaluated as a miracle of Vietnam ‘s economic system in recent old ages. Coffee industry has contributed significantly to the economic system of Vietnam, going the 2nd largest agricultural export of Vietnam, accounting for approximately 3 % of GDP, which provides support to more than 2.5 million people.

However, there are many thoughts bespeaking that Vietnam reached the figure one of java exporters because of exporting much more merchandises than Brazil at that clip. Indeed, in recent 11 old ages, while our growing rate was at 5.5 % per twelvemonth and we gained merely 1.26 million dozenss by exporting, Brazil ‘s gait was 5, 8 % per twelvemonth and they exported 1.8 million dozenss. In such conditions, although the export volume of Brazil every bit good as their monetary values has slowed down in recent months, while our export volume and our monetary values have increased aggressively ; the distance between us and Brazil is still really big. Therefore, it is a truly difficult challenge for us to keep the No.1 place.

The way to future

Recent statistics gave out by the Ministry of Agriculture and Rural Development shows that, Vietnamese agricultural trade excess is $ 8.2 billion with a entire export value of agribusiness, forestry and piscaries is estimated at $ 22.6 billion from January to November this twelvemonth. This is a important addition of 30.6 % over the same period last twelvemonth. Normally, holding trade excess is considered as a positive balance of trade.

To be more specific, the top 3 are seafood exports ( $ 5.6 billion ) , rice exports ( $ 3.5 billion ) , and java exports ( exceeded $ 3 billion for the first clip ) . Coffee rises 37.7 % in volume and 32.7 % in value over the same period last twelvemonth. Besides, FAO statistics show that in this decennary we have exported to the universe market about 10 million dozenss of java, gaining $ 60 billion in sum.

Obviously, exporting java brings about a batch of foreign currency to our state and proves to be a promising industry, making occupations for more than 2.5 people.

There is no denial that java sector holds an of import place in the economic system of our state.

However, the satisfactory consequences could non repair the failing of the domestic market: international endeavors with the FDI are herding out domestic endeavors. In fact, 60-70 % exported java belongs to houses with FDI. Although we export a big sum of java, its quality is non rather high. Therefore, to better the value for Vietnamese java every bit good as addition budget grosss, the Government encourages FDI in high processing engineering. However, they are non allowed to buy natural stuff from husbandmans. In response to these ordinances, in the Vietnam ‘s java capital Tay Nguyen, the authorization has discriminatory policies for FDI. The MNGs bargain natural stuffs, java beans through agent systems, Domestic Enterprises Ltd. , so carry out bad sorting and exporting. Alternatively of buying from export houses, they buy straight from our supply, this will force domestic houses to the weaker place in the long tally and MNGs is likely to monopolise our stuffs supply, non to advert the fact that it reduces revenue enhancement grosss of our state. They have large advantages like financially stable, smaller bank loans ( due to involvement rate difference ) , hundreds-of-year experience, and big market.

To get the better of troubles for domestic houses, market analysers agree that the relevant bureaus should supply synchronism solutions advancing development in the java value: technological invention, treating equipment. The province quality criterions must be in conformity with international criterions. Bettering merchandise quality harmonizing to the demands of the market is besides indispensable. If successful, the java industry will convey $ 20 billion / twelvemonth, alternatively of the current $ 3 billion.

Furthermore, the concerns themselves have to alter in competitory concern thought, increase the quality of java towards planetary value, use more effectual selling runs, …

Last, loan is ever the first and first conditions to production companies, Central bank should hold capital inducements for endeavors to assist them purchase stuffs at the beginning. Particularly, companies need to go on borrowing foreign currency, cut downing the force per unit area to vie with FDI, because FDI loans USD with involvement rates runing from 3.5 to 4.5 % / twelvemonth, while domestic endeavors loan at really high involvement rates. ( http: //www.baomoi.com/Bai-5-Ca-phe-truoc-nguy-co-bi-doc-chiem-vung-nhien-lieu/45/9749577.epi )

3. Decision

Coffee remains the cardinal agricultural export trade good of our state ‘s economic system on the universe market in recent old ages. Thankss to the attempts of the java industries in Vietnam to increase production and export, our state is among the biggest java exporter of the universe. However, there are still much work have to be done, and troubles which need to be solved, so that Vietnam can keep and better that place in the hereafter.

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