Vietnam’s coffee exports to EU surge as free trade deal takes effect

Vietnam ships first batch of coffee to EU with zero tariffs under the EVFTA with several  other agricultural products poised to enjoy preferential tariff in the coming time.

Since the EVFTA was first implemented on August 1 this year, the EU has eliminated tariffs on all of the country’s unroasted or roasted coffee products from their previous levels of between 7 percent and 11 percent, while processed coffee will also enjoy a 0 percent tariff compared to the previous rate of 9 percent to 12 percent, VOV reported.

Simultaneously, the EU has also agreed to protect 39 Vietnamese geographical indications (GI) under the terms of the EVFTA, including the GI of coffee, which serves to give the Vietnamese coffee industry an advantage over other rivals trying to penetrate the EU market.

Vietnam, the world’s second largest coffee exporter, has taken the lead in terms of exporting Robusta coffee for many years. Its annual export turnover reaches over $3 billion, accounting for 17.4 percent in volume and 9.5 percent of the world’s overall coffee export value.

Most notably, Vietnamese coffee has been marketed in more than 80 countries globally, with the EU becoming the largest consumer of the local product, making up 40 percent of the country’s total volume and 38 percent of total export turnover.

EU is Vietnam’s largest coffee market, accounting for 40 percent of the total output and 38 percent of the country's total export turnover with a value of $1.2 - 1.4 billion over the past five year, according to Ministry of Agriculture and Rural Development.

Thanks to the free trade agreement, Vietnam's August coffee exports to the EU market was seen at $76 million, up 34.7 percent month-on-month, the ministry said.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said that the domestic coffee industry has been a pioneer in public-private co-operation, ensuring sustainable development through the involvement of large Vietnamese and foreign corporations.

Over the past five years, Vietnam has replanted approximately 130,000 hectares of old coffee plants, exceeding the set target of 120,000 hectares.

The rate of coffee growing areas certified with sustainable cultivation methods has witnessed an increase of 60%, while the proportion of processed coffee rose from 5% in 2015 to 15% in 2020.

Beside coffee, Vietnamese businesses shipped first batches of rice and shrimp to the EU. Other agricultural products enjoying tariff cuts under the EVFTA include passion fruit, grapefruit, coconut, and dragon fruit.

Source: VOV