a study of export demand for coffee the case of intimex vietnam jsc

Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 0







A study of Export Demand for Coffee: The
Case of Intimex Vietnam JSC



Name : Nguyen GiaPhuc
English Name : Clinton
Date of Birth : 25/09/1963



Hanoi – 2013
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton i

ACKNOWLEDGMENTS


I would like to thank Dr. Eduardo T. Bagtang and the International
center Education of Thai Nguyen University, Southern Luzon State
University for guiding me throughout this research and for providing
me with the opportunity to conduct this research and for helping me to

carry out the necessary revisions to this dissertation.
I would also like to express my deep gratefulness to Vietnam
Intimex Company for providing me with useful and necessary
information for doing this research, to my wife, my son and daughter,
my colleagues for encouraging, inspiring me when I conduct this
research, giving necessary feedbacks for making this dissertation
successful.
Finally, I would like to thank all my classmates for giving me
constant support and encouragement as well as helping me with needed
materials and reference.

Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton ii

APPROVAL SHEET x
CHAPTER I: THE PROBLEM AND ITS BACKGROUND 11
1.1. Background of the study 14
1.2. Statement of the problem 18
1.3. Objectives of the study 18
1.4. Hypotheses of the study 20
1.5. Significance of the study 20
1.6. Scope and Limitations of the Study 20
1.7. Location of the study 21
CHAPTER II: REVIEW OF RELATED LITERATURE AND RELATED
STUDIES 23
2.1. Coffee Production in Vietnam 23
2.1.1. Coffee Export into USA‘s market 26
2.1.2. Vietnam coffee export: Lesson learnt 29
2.1.3. Vietnam coffee industry at present 31
2.2. Future of Vietnam Coffee Export 36

2.2.1. Quality Improvement for Vietnam coffee 37
2.2.2. Production cost reduction 37
2.2.3. Variety and product shifting, production adjustment to the market
demands 38
2.2.4. Coffee consumption promotion in the domestic market as well as to great
potential countries 39
2.2.5. Reorganization of production and export structure in a better scientific,
modern, effective and steady way 39
2.3. Major Market For Coffee Exports 40
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton iii

2.3.1. Problems Encountered in Doing Business in the US 41
2.3.2. Countries Considered by Vietnam as Competitors 42
2.4. Company Analysis: The Intimex JSC Vietnam 43
2.4.1. Features 43
2.4.2. Organizing structure 45
2.4.3. Management 46
2.4.4. Achievements of Intimex Vietnam 50
2.5. Other Related Studies 51
2.6. Conceptual Framework 61
CHAPTER III: METHODOLOGY 64
Methods and Procedures 64
3.1. Research Design and Methodology 64
3.2. Respondents of the Study 64
3.3. Data Gathering Tools 65
3.4. Treatment of Data 67
CHAPTER IV: RESULT AND DISCUSSION 69
4.1. The Current Status of the Coffee Exporting Companies of Vietnam 69
4.2. Qualitative Data Analysis 89

4.2.1. Existing competitors and market structure of coffee export 89
4.2.2. Product Quality 91
4.2.3. Coffee drinking trends in the American 92
4.3. Test of Significant Relationship 94
4.3.1. Hypothesis testing 100
4.3.2. Individual partial coefficient test 102
4.3.3. Testing overall significance of the multiple regressions 105
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton iv

4.3.4. Testing the drop variable in the regression model 106
4.3.5. Errors in the model 108
CHAPTER V: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 116
5.1. Summary of Findings 116
5.2. Conclusions 119
5.3. Recommendations 120

BIBLIOGRAPHY
APPENDICES
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton v

ABSTRACT
Following the trend of globalization, especially after Vietnam joins the WTO, in
order to enter the international playing field, Vietnam has determined that it needs to
boost exports. In terms of agricultural products, the export of coffee is one of the first
priorities. With that business orientation, enterprises specializing in processing and
exporting coffee are looking for strategy to penetrate international markets. One of the
leading enterprises pursuing this direction is the Vietnam Intimex Joint Stock
Corporation (Intimex). With its export turnover reaching an annual average of nearly

$300 million, Intimex is the leading enterprises in Vietnam of which product lines
have been certified by many associations of coffee in the world, namely 4C,
UtzKappeh, Organic coffee.
For several years, the United States (U.S) has become one of the biggest importers
of coffee products. The Intimex‘s export value of coffee to this market accounts for
US Dollar 200 million in 2009.
With a view to maintaining its dominant status in this field and increasing its
market shares in the U.S, Intimex always place much importance to the marketing
activities, having the good marketing mix will bring efficiency to the company‘s
export business.
Given the above-mentioned rationale, I have decided to choose the topic: A study
of export demand for coffee: The case of Intimex Vietnam JSC.
After collecting data from both primary sources by utilizing questionnaires,
interviews and secondary sources: articles, published documents, books and online
articles, regression analysis models were utilized to find out the factors affecting
coffee import demand of the US. By statistical approaches, the dissertation points out
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton vi

different qualitative and quantitative factors that have influence on the coffee import
demand. These factors are:
 Quantitative data: commodity price, coffee beverage price index,
price of the biggest substitute, and coffee market share.
In data analysis, E-view program was used to deal with figures from secondary
sources. By statistical methods, I draw the conclusion about the dependent variables
as follow
On the hypothesis of significant relationship, it was found out that the key
factors affecting coffee import demand are commodity price, price of the
biggest substitute (tea) and coffee market share of Vietnam in the US market.
The commodity beverage price index of the U.S. as one of the four has no

significant impact on the dependent variable.
The model of regression analysis has been checked for errors: multi-co
linearity, heteroskedasticity and autocorrelation. In general, after conducting
a set of statistical treatments, the model proves to be quite reliable and can
explain the dependent variable based on independent variables.
After data analysis using regression models, results are drawn and conclusions are
made. Based on those results and conclusions, I have point out the recommendations
to improve current situation of coffee export to the US markets in Chapter 5. These
conclusions are based on findings from the data analysis and qualitative data
assessment.
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton vii

LIST OF FIGURES
Figure 1: Organizational Chart of Intimex Vietnam 17
Figure 3: Coffee productivity, area, and output in province Daklak in period 2006–
2012 (%) 25
Figure 4: Vietnam coffee export market share 2st half of 2013 26
Figure 5: Amount and value of coffee export into USA‘s market for period 2006–
2012 27
Figure 2: Conceptual Paradigm 63
Figure 6: Data collection and process 66
Figure 7: Coffee market shares 80
Figure 8: World's export value of coffee 90
Figure 9: Heteroskedasticity graph 111



Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton viii

LIST OF TABLES
Table 1: Vietnam Coffee export to the world 36
Table 2: List of respondents 70
Table 3: No. of Companies with Coffee as Major Export 71
Table 4: Coffee Export destinations 72
Table 5: Type of Coffee being exported to USA 72
Table 6: Possible problems when doing business in the US for Vietnam coffee
enterprises 73
Table 7: Opportunities for Vietnam coffee exporters 74
Table 8: Solutions posed by respondents 75
Table 9: US Import Policies That Affected the Coffee Export Business of Intimex
Vietnam JSC to US 76
Table 10: Factors that affected the market share of Vietnam Coffee Export 77
Table 11: Vietnam Government Interventions to Help Coffee Industry 78
Table 12: Countries Considered as Competitors in Coffee Export 79
Table 13: Marketing Strategies Adopted and Found to be Effective as Identified by
Intimex Vietnam JSC 81
Table 14: Product Policies Adopted and Found to be Effective by Intimex Vietnam
JSC as Marketing Strategy 82
Table 15: Distributor chain Policies Adopted and Found to be Effective as Marketing
Strategy as Identified by Intimex Vietnam JSC 83
Table 16: Price Policies Adopted and Found to be Effective as Identified by Intimex
Vietnam JSC 84
Table 17: Advertisement Policies Adopted and Found to be Effective as 85
Table 18: Challenges experienced by Intimex 86
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton ix

Table 19: Measures and Strategies Recommended by Intimex Vietnam JSC to

Increase Volume of coffee Export to the US 88
Table 23: Analysis of Covariance 100


Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton x






THAI NGUYEN UNIVERSITY SOUTHERN LUZON STATE UNIVERSITY
Socialist Republic of Vietnam Republic of the Philippines

APPROVAL SHEET

This thesis, entitled ―A STUDY OF EXPORT DEMAND FOR COFFEE:
THE CASE OF INTIMEX VIET NAM JSC‖, prepared and submitted by Nguyen
Gia Phuc in partial fulfillment of the requirements for the degree of Doctor in
Business Administration, has been examined and recommended for acceptance and
approval for FINAL ORAL EXAMINATION.






Adviser

July 25, 2013
Date



Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 11

CHAPTER I: THE PROBLEM AND ITS BACKGROUND
Introduction
Founded in 1979, Intimex Vietnam JSC has operated for 32 years with many ups
and downs along with the economy of Vietnam. Until now, the company has got
remarkable achievements during the operation and development process, Intimex has
affirmed its position in the domestic and international market, to become one of the
leading companies in import and export, supermarket business and manufacturing
sectors of Vietnam (Intimex Company Profile, 2010).
The success was recognized by the State, in 1986 the Government decided to put
Intimex into one of the largest corporations of the Ministry of Domestic Trade,
Intimex has been as important as the big corporations for many years in the industry
and in 1988 the company has been honored by the State with the third class Labor
medal (Intimex Business History, 2010).
A relatively new activity for beginning period, has been thoroughly exploited by
Intimex was sales of foreign currency for staff and oversea students, ( called spot
export) in order to take advantage of markets and products and that were legalized by
the States, Intimex implemented the strategy and the results were very encouraging.
The creative application of this policy increased the Company's foreign currency
funds a lot.

In the early 90s, the subsidy economic mechanism was eliminated, Intimex and
other businesses throughout the country are confident to get into the market economy.

State regulatory mechanism was the open but social upheaval was really complicated,
the economic policies of the Party and State are in the testing phase that was a time
series of companies protected by subsidy system failed to operate to generate income.
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 12

Unemployment rose and there was a production surplus. Intimex was also one of the
units enjoying the advantages of the mechanism of the subsidy system, so it was also
inevitably affected by this storm surge. The company had to face lots of disadvantages
now.

Facing this difficult, company leaders, trade unions and staff tried their best to
overcome, the measures were set out in line with new situations, and the quota was
initially formed. Open regulations facilitate companies to promote creativeness in
doing business. Thanks to the positive measures, the company has survived and
developed until now.

In the following years, the company continued to perfect the by-the-piece
mechanism for departments that have taken initiative in creating a dynamic business,
breaking the deadlock and stagnation. The company's activities were close with the
market and brought about certain results, maintaining the company's development,
ensuring the lives of employees, while many other state enterprises went bankruptcy
or made losses.

Entering the new millennium, besides the basic advantages, the company faced
many difficulties and challenges. The world economy faces new recession cyclones.
Integration process poses new issues to businesses, especially trading companies: to
exist or not in the context of cumbersome structural apparatus, inappropriate labor and
wage policy with market economies, outdated and seriously degraded infrastructure,
working capital losses in the mechanism transition process. In that context, what to do

to bring the company through tough times and create the competitiveness in the
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 13

market and integrate into the international economy? This is a difficult problem that
companies have to find an optimal solution. The 5-year business strategy (2001-2005)
was born in this situation and has demonstrated the validity through remarkable
results. In particular, the export performance of the Company continues to rise:
exports turn-over has soared admirably. A rapid rise in exports has contributed to
enlarge rapidly the scope of the company.
Over the past few years, Intimex had the boom in import and export business,
especially exports turn-over. In 1999, Intimex‘s export turnover was USD 23 million
and in 2007, it reached USD 227 million (Intimex Company Profile, 2010). The
company's exports accounts for 70% of the total import and export with mainly
agricultural products, especially coffee and pepper. For many consecutive years,
Intimex was number two on coffee exports and was the best pepper exporter in the
country. Thanks to Intimex‘s export activities, Vietnam's strong traditional
commodities such as coffee, pepper, agricultural and aquatic products have
affirmed its position in the world's largest market. The company has been very proud
of the results.
To achieve such great success, Intimex concentrated on developing export, export
growth was the company‘s first priority. Intimex actively enhance the value of goods
processing of exported products, production development by investing in a number of
manufacturing and processing factories of agricultural products such as: Clean pepper
processing plant in Binh Duong, cassava starch production plant in Nghe An, the
aquatic plant in Thanh Hoa These projects are and will help ensure high-quality and
stable supply of goods for domestic market and export. Besides, Intimex always
focused on improving export business to raise the prestige in the domestic and
international market.
Export demand for coffee: The case of Intimex Vietnam JSC

Nguyen Gia Phuc– Clinton 14

Besides business, Intimex also focuses on market development. The company has
been doing business with more than 100 countries and is continuing to looking for
new customers. It also actively participates in business promoting activities and trade
fairs.
Intimex pays special attention to human factors. The staff of the company has
continuously improved their knowledge and raise qualifications as well as
professional abilities. The achievements of Intimex today were the contribution of the
Board of Directors and Company‘s employees.
With these achievements, the company has received numerous awards by State
agencies and organizations, namely Vietnam Gold Star Award in 2005, the title of the
most satisfying supermarket in 2008, golden Cup for supermarket brand in 2009, Top
500 enterprises in Vietnam in 2008, 2009 and 2010 Especially in 2009, to
commemorate the 30th anniversary, the company was honored by the State with the
Second Class Labor Medal (Intimex Company Profile, 2010).
Since 2009, the Company began operating paradigm from state-owned enterprises
into a joint stock companies. In the early days of operation under the new model,
there were difficulties to be solved, obstacles and many challenges that Intimex had to
overcome, but in the context of new opportunities and challenges, the company will
continue to utilize its available and potential strength to further confirm its leading
position in the field of import-export and domestic business and to promote
production. That is the goal orientation of Intimex Corporation Vietnam today.

1.1. Background of the study
Coffee was introduced to Vietnam in 1857 by the French and slowly grew as
producer of coffee in Asia. The height of coffee production occurred in the early 20th
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 15

century as small scale production shifted towards plantations. The first instant coffee
plant, Coronel Coffee Plant, was established in Biên Hòa, Đồng Nai Province in 1969,
with a production capacity of 80 tons per year.
The Vietnam War disrupted production of coffee in the Buôn Ma Thuột region,
the plateau on which the industry was centered. Although seldom involved in conflict,
the area was a crossroads between North and South and was largely depopulated.
After the North Vietnamese victory the industry, like most agriculture, was
collectivized, limiting private enterprise and resulting in low production.

Following ―Đổi mới‖ reforms in 1986, privately-owned enterprise was once again
permitted, resulting in a surge of growth in the industry. Cooperation between
growers, producers and government resulted in branding finished coffees and
exporting products for retail. It was during this time that many new companies
involved in coffee production were established, including Đắk Lắk-based Trung
Nguyên in 1996 and Highlands Coffee in 1998. Both of these continued on to
establish major brands distributed through a widespread network of coffee shops. By
the late 1990s, Vietnam had become the world's #2 coffee producer after Brazil, but
production was largely focused on poor-quality Robusta beans—considered inferior
to Arabica due to their bitterness—for export as a commodity (Vietnam Coffee
Annual Report, 2010). Recent government initiatives have sought to improve the
quality of coffee exports, including more widespread planting of Arabica beans, the
development of mixed-bean coffees, and specialty coffee such as kopi luwak
(Vietnamese: cà phê chồn, "weasel coffee").

Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 16

By 2000, coffee production had grown to 900,000 tons per year. Price decreases,
however, led annual production to drop to around 600,000 tons/year in 2003. In 2009,
Reuters reported Vietnamese coffee exports at "an estimated 1.13 million tons" for the

previous year, stating that coffee was second only to rice in value of agro-products
exported from Vietnam (GSO, 2010).
Vietnam is the second largest producer after Brazil, accounting for 14.3 per cent
of the world market share (World Bank, 2010). The quality of the beans, however, has
typically limited their marketability. Robusta coffee accounts for 97 per cent of
Vietnam's total output, with 1.17 million tons exported in 2009, a value of USD 1.7
billion (GSO, 2010). Arabica production is expected to rise owing to the expansion of
growing areas. Other types of coffee grown in Vietnam include Chari (Excelsa) and
Catimor.

Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 17





Chief Executive Officer Board

Management Division
Market Management
Business Division
Direct Units
Subsidiary Companies
Joint-venture Companies
Finance-Accounting
General Economy
Human Resource
Training Staff
Administrative

Wholesale and Store
Business 1
Business 2
Business 3
Intimex Hanoi
Production and Trade
Joint stock Company
Intimex Saigon Joint
stock Company
Intimex Export and
Import Company
HaoNam
Intimex
Market
Intimex
Quang
Minh
Intimex
Commer
ce&
Service
Intimex
QuangNi
nh
Intimex
HaiPhon
g
IntimexT
hanhHoa

Intimex
Nghe An
Intimex
Da Nang
Intimex
Dong
Nai
SwordLa
keIntime
x Market
Lac
TrungInt
imex
Market

Huynh
ThucKha
ngIntime
x Market

Dinh
Cong
Intimex
Market

HoaBinh
Intimex
Market

Hung

Yen
Intimex
Market

Hai
Duong
Intimex
Market

QuyNho
nIntimex
Market

Figure 1: Organizational Chart of Intimex Vietnam
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 18

INTIMEX Company is one of the leading coffee export enterprises in the country
besides other commodities. The company has got many important achievements that
have been recognized by the state organizations such as Ministry of Industry and
Commerce, Ministry of Agriculture and Rural Development.
In 2006, the company received the title of ―The company with excellent
achievements‖ Award held by International Economic Cooperation Committee and 53
other organizations.
INTIMEX Company is one of the leading coffee export enterprises in the country
besides other commodities. The company has got many important achievements that
have been recognized by the state organizations such as Ministry of Industry and
Commerce, Ministry of Agriculture and Rural Development.
In 2006, the company received the title of ―The company with excellent
achievements‖ Award held by International Economic Cooperation Committee and 53

other organizations.
1.2. Statement of the problem
The coffee-exporting Vietnam companies are relatively small and medium in size.
These companies particularly INTIMEX aim to expand their market share in coffee in
the United States of America (USA). In order to this, the companies must understand
the playing field they have to do business into. This study therefore aimed to
determine the measures and strategies to increase the volume of coffee export to the
USA.
1.3. Objectives of the study
1. To determine the current status of the companies in terms of?

Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 19

a. Major business of the company
b. Major market for coffee exports
c. Types of coffee exported to the US
e. Expansion of coffee export to the US
2. To determine the problems encountered in doing business in the US.
3. To identify possible solutions to the problems encountered in doing business in the
US.
4. To know the specific Import policies of US that affected the Intimex Vietnam JSC
coffee export business to the US?
5. To determine the factors that affected the market share of Vietnam coffee exporting
companies to the US as per experience of Intimex Vietnam JSC?
6. To determine the interventions that the Vietnam Government have introduce to
help coffee export to the US?
7. To know the countries that Vietnam would consider as competitors in terms of
coffee export to the US?
8. To determine the experiences of Intimex Vietnam JSC that helped the company

became Successful in terms of the following:
8.1. Marketing strategy
8.2. Product Policies
8.3. Distributor chain Policies
8.4. Price Policies
8.5. Advertisement Policies
9. To identify the challenges experienced by Intimex Vietnam in exporting coffee?
10. What Measure and strategies can INTIMEX Vietnam JSC propose to increase
volume of coffee export to the US?
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 20

11. To establish if there is a correlation of the coffee price in the USA, commodity
beverage price index of the US, tea price in the US, with the market share of Vietnam
in the US with the coffee export to the US?
1.4. Hypotheses of the study
- Coffee export turnover is affected by different factors including:
Qualitative data: existing competitors, product quality, coffee drink habit and
taste.
Quantitative data: commodity price, coffee beverage price index, price of the
biggest substitute, and coffee market share.
1.5. Significance of the study

This study has practical implications to coffee exporting companies to increase
their export performance as well as turnover. The study will figure out what are the
key factors affecting export performance in general and in coffee industry in
particular. The figures are up to date and reflect the real happening so they should be
a reliable source for companies who want to do well in American market.
Besides, this study also investigates the characteristics of American coffee market
and the big companies in the industry. Moreover, it also points out the weaknesses of

Vietnamese coffee exporting firms that lead to their poor performance of failures over
the past few years. As a result, the study can help the companies to understand well
about where and who they are doing business to in American coffee market. It also
helps them avoid some wrong activities that will cause failures.
1.6. Scope and Limitations of the Study

Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 21

The study investigates current situations of coffee exporting in Vietnam. It also
points out the personalities of American market and key players in coffee industry.
INTIMEX Vietnam is the chosen company who has been exporting coffee to
American market over the years.
Because of the nature of this study, the results and findings will be mainly based
on data from various secondary sources. The secondary data was taken from industry
reports, books, academic papers, periodicals, editorials, articles, databases, studies
different authors, and websites related to the coffee industry. The data of coffee
export shows trends in coffee industry. However, the data might not make a good
forecast of future in such a fluctuating world business environment.
This study shows an in-depth analysis of coffee export to American market.
However, the other markets like EU and Asia have not been given enough
consideration. US are the biggest and most potential market for Vietnam‘s coffee
export. It is the biggest coffee importer of the world in general and of Vietnam in
particular. This is the reason why the study aims mainly at US market and compare
with other markets.
1.7. Location of the study
This study was carried out in Vietnam, with questionnaires distributed to 20
coffee export firms in Hanoi and Ho Chi Minh City. The primary data from
questionnaires was collected via email was used to discuss qualitative data which
shows the factors affecting coffee import of the US from Vietnam. Also, interviews

with managers of Intimex Company Headquarter (96 Trần Hưng Đạo Street – Hoan
Kiem District, Hanoi) were used to collect organization‘s perspective and attitude as
well as their approaches to coffee export in the future.
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 22

Secondary data was collected from books academic papers, periodicals, editorials,
articles, databases, studies different authors from National Library (31 Tràng Thi
Street, Hoan Kiem District, Hanoi) and World Bank (8th Floor, 63 Ly Thai To Street,
Hanoi, Vietnam).
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 23

CHAPTER II: REVIEW OF RELATED LITERATURE AND
RELATED STUDIES
This chapter presents the literature and studies relative to the export demand
for coffee of Vietnam and the experience of Intimex JSC, Vietnam in exporting
coffee.
The Companies in Vietnam Exporting Coffee
2.1. Coffee Production in Vietnam
The total coffee area of Vietnam reached 400,000 hectares in year 2000, and about
500,000 hectares in year 2006, accounting for 4.14% of total area for all kinds of
cultivation plants. Vietnam has acquired world‘s second place on coffee export,
after Brazil, and world‘s first place on production of Robusta coffee with
market share 25%. Nguyen (2013) in its article published in gain.fast.usda.gov
elaborated on Vietnam‘s coffee growing areas continues to expand despite of GOV‘s
goal to maintain area at 500,000 ha. Coffee prices remain high and provide a strong
incentive for farmers to plant additional area. According to the Ministry of
Agriculture and Rural Development (MARD) and statistics from Provincial
Departments of Agriculture and Rural Development, coffee area increased by 8

percent to 616,000 ha in 2012 from 571,000 ha in 2011. Actual coffee area likely
exceeds GOV official estimates. Post revises its estimates coffee production for
MY2012/13 to about 25 million bags, or 1.49 MMT of green coffee, about a 4 percent
drop from the previous MY due to unseasonal rains during the blossoming period.
This upward revision of Post‘s previous estimate for MY 2012/13 (VN2056) is due to
the pace of green bean exports during the first seven months of the MY. Through the
first seven months of MY2012/13 Vietnam reported a 3 percent increase in green
Export demand for coffee: The case of Intimex Vietnam JSC
Nguyen Gia Phuc– Clinton 24

coffee exports over the same period of the last MY. Given this strong export pace,
Post also revises the MY2012/13 export estimate upwards to 23.8 million bags, or
1.43 MMT GBE. While exports-to-date are outpacing last MY, Post estimates that
exports for the remaining months of MY2012/13 will trend lower than last MY,
leading to a 3 percent year-to-year decline in MY2012/13 total coffee exports. Farm-
gate and export prices have remained relatively stable through the last two MYs and
continue to create a strong incentive for farmers to expand area and replace aging
trees. Post‘s initial forecast of MY2013/14 production is 22.9 million bags, or 1.37
MMT of green coffee, about an 8 percent drop from the previous MY. This decline in
production is attributed to drought conditions in the central highlands, the main coffee
growing area in Vietnam, which prevailed for most of the first three months of 2013.
Precipitation picked up rapidly during April 2013, limiting the adverse effect of the
drought. However, Post believes the drought affected crop will limit Vietnam‘s export
potential in MY2013/14. Post‘s initial total export forecast for MY2013/14 is 21.3
million bags, or 1.28 MMT GBE, a 10.5 percent drop from the previous MY. Strong
domestic consumption of coffee continues, Post‘s initial forecast of MY 2013/14
domestic consumption is 2 million bags, or 120 thousand metric tons (TMT) GBE, up
10 percent from the previous MY. The first quarter of 2013 saw the arrival of
Starbucks to Vietnam with their first store opening in District 1 of Ho Chi Minh City.
In the report of Vietnam Ministry of Agriculture and Rural Development it

revealed that among Vietnam‘s provinces having areas for coffee cultivation,
province Daklak has played important role, accounted for more than 50% total
area for coffee production in Vietnam. Coffee production in Daklak has been
conducted by householders, began largely from year 1990 and get further
growth currently. Many householders of coffee production in the past were