Hanoi (VNS/VNA) - Vietnam's coffee industry willprobably suffer more losses in the second quarter due to the COVID-19 pandemic,Phan Xuan Thang, Vice Chairman of the Vietnam Cocoa and Coffee Association, hassaid.

The COVID-19 outbreak has forced many countries toannounce social distancing or lockdowns, so a series of restaurants and coffeeshops must close, leading to strong reduction in coffee demand.

At present, the restaurants and coffee shops arechannels with the largest consumption of coffee.

Due to the lower demand, the coffee processorshave mainly used their inventories, according to Thang. Therefore, localenterprises have signed few coffee export contracts. That has had a greatimpact on domestic coffee production and export activities in the secondquarter.

The Vietnam National Coffee Corporation(Vinacafe), one of large coffee processors and exporters in Vietnam, has had alot of difficulties in offering its products to partners. The globalconsumption of coffee is only about 20 per cent compared to the volume beforethe pandemic.

"The association has expected big sport andcultural events like the 2020 Summer Olympics to increase demand for beverages,especially coffee. However, those events have been postponed,” Thang said.

In addition, although the demand for consumergoods has increased due to the strong spread of COVID-19, coffee is notconsidered an essential product.
There would be strong fluctuations in coffeeprices in the second quarter because of lower consumption in the context of thepandemic, he said.

The association said Vietnam’s coffee exports didnot suffer impacts from the pandemic in the first quarter because the localcoffee enterprises completed their export contracts signed last year, accordingto vietnambiz.vn.

However, the export value in the quarter was nothigh because of a low export price, so most of the enterprises suffered lossesto maintain their reputation with their partners, Thang said.

According to the Ministry of Agriculture and RuralDevelopment, in the first quarter of this year, Vietnam exported 474,000 tonnesof coffee, earning 801 million USD. Those figures declined by 3 percent in volumeand 5.6 percent in value year on year. Of which, the coffee exports in Marchreached 154,000 tonnes worth 261 million USD.

Especially, the ministry reported that the coffeeexport value to the UK in the first quarter decreased by half compared to thesame period of last year to 13.5 million USD.

The Government should have support for theindustry to solve difficulties due to the pandemic, Thang said.

He also hoped that the demand for coffee wouldincrease next year because the global sport and cultural events would openagain after the pandemic ends. That would be a big opportunity for the domesticcoffee industry to resume exports in 2021.

Besides that, in the current situation of droughtand lower prices, farmers in many countries had changed to grow other trees,leading to lower supply next year.

That will be one of the factors to increase thecoffee price next year, according to the ministry./.