What standards to be applied for coffee exports?

02

What standards to be applied for coffee exports?

Coffee exporters cannot sign export contracts at this moment, as they do not know what standards will be applied for the exports, while the new coffee crop 2007-2008 is only one month away. Most refused coffee sourced from Vietnam The International Coffee Organisation (ICO), of which Vietnam is a member, has recently announced that the volume of refused coffee of Vietnam in the 2006-2007 crop kept increasing, according to the statistics of LIFFE. Among the refused 708,300 coffee bags (60 kg for each), Vietnamese products accounted for 88%, or 37,000 tonnes, an increase of 19% over the previous crop. Van Thanh Huy, Chairman of Vicofa (the Vietnam Coffee and Cocoa Association), said that most local coffee exporters still applied TCVN 4193:1993 standard, set in 1993, out of date compared to international standards. Currently, most exporters apply R2 standard for robusta. Every year, Vietnam exports 800-900,000 tonnes of coffee with 1% of impurities, and 8-9,000 tonnes are refused. Though having good aromatic flavour, Vietnam-made coffee is always ranked as 3rd or 4th class products due to impurities and broken beans. Many coffee exporters in Dak Lak said that they were capable of making coffee which could meet R1 standard, which is $30-40/tonne more expensive than R2 standard products. However, the application of R2 standard is the habit of enterprises. One coffee dealer related that he wanted to sell R1 coffee, but the buyers all wanted to buy R2 products, and he had to add ‘some more things’ to turn R1 into R2 coffee. Which one: previous or new standard to be applied? The 2007-2008 crop will begin in October, or just one more month. Normally, enterprises make deals and sign export contracts with foreign partners several months before the crop begins. However, coffee cannot do that this year, because they don’t know if the TCVN 4193:2005 will be applied this year. In May 2007, the Ministry of Trade, now the Ministry of Industry and Trade, sent a dispatch to coffee exporters, saying that the new standard TCVN 4193:2005 would be applied this year in order to upgrade the export quality. After that, the Ministries of Trade and Agriculture and Rural Development both sent dispatches to the Ministry of Science and Technology (MST) requesting that the ministry promulgate the regulations on examining coffee exports in accordance with TCVN 4193:2005, commencing from October 1, 2007. However, MST has not made any move. TCVN 4193:2005 has been recognised by ICO which wants Vietnam to apply it soon. However, problems still exist. Mr Huy from Vicofa, on one hand, thought that the new standard should be applied, on the other hand, said that the tardiness in enacting legal documents would put difficulties on exporters. In order to apply the new standard, enterprises need more time to upgrade the processing line and purchase more equipment. Nguyen Thanh Bien, Deputy Minister of Industry and Trade, has warned that once the new standard was applied, several tens of thousands of tons of lower quality coffee would be weeded out. Do Ha Nam, Director of Intimex, the biggest coffee exporter in Vietnam, said that farmers would need more time to change their habits of harvesting and drying; therefore, the new standard should not be applied right this year. “This would put hard pressure on tens of thousands of farmers who grow coffee nationwide,” Mr Nam said, adding that it was necessary to draw up a roadmap for the application of the new standard, while it could not be implemented immediately. Vietnam exported 893,000 tonnes of coffee in the first seven months of the year, earning $1.32bil of the targeted $1.46bil worth of coffee export turnover for the whole year of 2007.

Source: Thời báo Kinh tế Sài Gòn