Vietnamese coffee exporters hesitate to apply new standards

06 | 11 | 2007

The new standard for coffee, TCVN 4193-2005, issued in 2005, has been applied by 10% of enterprises only, or to 1-1.5% of coffee exports every year.

New standard set up already

That explains why Vietnam has a high ratio of refused exported coffee. According to the International Coffee Organisation (ICO), 88% of the rejected coffee in the world from September 2006 to March 2007 came from Vietnam, which represented an increase of 19% in the quantity of Vietnamese coffee rejected compared to the previous six months.

Experts have called on Vietnamese processors and exporters to apply new standards on export coffee quality in order to minimise the ratio of rejected coffee.

Nguyen Thai Hoa, director general of Thai Hoa Production and Trading Co, one of the five-biggest coffee export companies in Vietnam, said that the application of TCVN 4193-2005 to export coffee was now very necessary.

Hoa said that the quality of Vietnam's raw Robusta coffee is not as bad as people think. If farmers do not pick unripe beans and follow regulations in collecting and processing, Vietnam's coffee would have a low ratio of bad beans, 60-70 bad beans for every 300 grams.

According to Doan Trieu Nhan, deputy Chair of the Vietnam Cocoa and Coffee Association, the TCVN 4193-2005 set up by Vietnam proves to fit ICO's standards. However, the standard is not a must in Vietnam, therefore, many enterprises do not apply it. Meanwhile, a lot of enterprises protested the application of TCVN 4193-2005 for export coffee after the former Ministry of Trade released a document, requesting enterprises to apply TCVN 4193-2005.

"I think the government should take actions right now to improve the quality of export coffee," said Nhan.

He added that it was necessary to give more time to companies to get prepared for the new standard application. However, the deadline for the new standard application should not be prolonged due to the urgency of the problem.

but not welcomed by enterprises

Vu Duc Tien, director general of Tay Nguyen Coffee Export Co, said that the application of TCVN 4193-2005 means that enterprises will have to change all the machines and the production process (purchasing, preliminary treatment and packaging), which will take time and money.

Tien also warned that the application of the new standard will lead to a decrease in export quantity since there will be more bad product. It is expected that the volume of bad-quality coffee may account for 25-30% of total coffee output.

The representative of Dakman coffee joint venture estimated that if applying the new standard, the ratio of waste products may reach 60,000 tonnes, worth US$93.3 million.

Tien does not think that the application of the new standard will help exporters easily sign contracts with their partners. "We may face a lot of disadvantages in negotiating with our partners," he said, adding that the coffee quality appraisal by counting errors proves to be suitable for advanced markets, not for Vietnam's exports.

"Exporters and importers cannot find a common voice while applying the new standard. It is not the right time to apply the new standard now," Tien said.

According to Bui Dinh Tru, Head of the Science and Technology Division under Vinacafe, Vietnam should encourage its enterprises to apply TCVN 4193-2005 for the 2007-2008 crop, and negotiate with its traditional clients to buy Vietnamese coffee in accordance with the new standard.

The roadmap for applying TCVN 4193-2005 suggested by the Ministry of Agriculture and Rural Development

2007-2008: encourages enterprises to apply TCVN 4193-2005, 20% of enterprises and 5% of exports will apply the new standard.

2008-2009: TCVN 4193-2005 will be compulsory for exports. The consignments of export that do not meet TCVN 4193-2005 will still be allowed to get customs clearance. However, enterprises will have to make commitments to follow the new standard for subsequent consignments.

2009-2010: exporters of the consignments of coffee that cannot satisfy the new standard will have to settle the problems before shipping.

Source: Intellasia News Online

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