Deputy Trade Minister Mai Van Dau identified the weaknesses in Vietnam’s coffee production, including its low quality and poor future outlook at a conference in Hanoi on Tuesday.

To overcome those issues, Dau suggested that the project to build a coffee transaction market in the Central Highlands province of Dak Lak be implemented immediately, to ensure that it provides necessary information about coffee prices and market, supplies sufficient standard products, and serves trade activities. Control mechanisms should be initiated to stop Vietnamese producers flooding markets at the beginning of each season.

In addition, coffee exporters should seek more new overseas markets and diversify consumption channels, establish relations and boost direct exports to reduce reliance on big importers. The Ministry has issued regulations for provision of monthly trade information and solutions to cope with fluctuations on the coffee market. The Ministry will raise the image of Vietnamese coffee through national key promotion programs, and diversify products to increase the export value.

Besides the export support credit fund and bonus policies, next year the Ministry plans to allow some businesses to participate in coffee transaction markets abroad, using pricing insurance services to limit risk.

Training courses on foreign trade skills will be held for coffee exporters, while the role of coffee associations should be raised in outlining future development orientations.

According to the Vietnam Coffee-Cacao Association, Vietnam will expand the acreage of Arabica coffee in suitable areas to maintain annual output of between 750,000-800,000 tonnes. Modern technology will be effectively applied in the production stages from seed selection and cultivation, to harvest, processing and preservation.

Nguyen Van Lang, Chairman of Dak Lak People’s Committee is among the largest coffee producers in the world, but Vietnamese beans are of low quality.

The Ministry of Agriculture and Rural Development reported that it is gradually replacing low-quality coffee trees with new high-yield, high-quality coffee varieties in order to obtain 3-6 tonnes of coffee nuts per ha.

Vietnam’s integration into the global market and the ASEAN Free Trade Area (AFTA) has progressed well, but this also means increased competition, particularly against foreign rivals. Therefore, it is essential for domestic manufacturers to find new outlets. The European Union (EU), with its recent enlargement, is a promising, if very demanding market. In order to place products in this market, Vietnamese enterprises must meet certain criteria set by the EU, particularly to obtain European Conformity (CE) certification.

The EU has implemented a system to protect consumer health as well as the condition of merchandise, and the environment. The CE mark is mandatory for approximately 70 percent of the goods sold in the EU, and it is often referred to as the "Trade Passport to Europe" for non-EU products. It is a manufacturer’s declaration of compliance with EU safety, public health and consumer protection standards. A CE mark affixed on the product indicates that it conforms to all relevant essential requirements and other applicable provisions by means of European standards. Twenty-three groups of products, including machinery, electrical equipment, construction products, medical devices and even children’s toys are all governed by the marking.

Mr. Klause Ehret, General Director of TUV Rheinland Vietnam, a German agency authorized by the EU to issue the seal, explains how to obtain a CE mark. He said, "The first step is that you have to check your products and you have to compare them with the relevant directives and standards set by the European community. After you check your products, if they conform to the directives and standards, then you have to sign a declaration of conformity that indicates that everything was appropriately manufactured and compared to the standards. You then have to supply technical information, after this you may affix the CE mark legally on your products, and of course you will need a distributor in the European Community to take on responsibility for moving your products in the market. That means Vietnamese manufacturers need somebody in Europe who bring the goods for you into the community, it can be a company, a representative and even a buyer".

According to Mr. Pham Ngoc Tran, Deputy Director of the Vietnam Directorate of Standards and Quality, EU expansion provides a great opportunity for Vietnamese enterprises to boost trade. Gaining CE certification could also help speed up Vietnam’s bid for WTO membership. Mr. Tran said "Vietnamese enterprises still lack knowledge of CE marking. If due concern is given they will gain greatly from the export of their goods to the EU market and other markets. It will make it easier for their products as Vietnam, when it joins the World Trade Organization, will apply the product safety criteria on both domestic and imported goods".

Mr. Hoang Van Nhuong, Deputy General Director of the state-owned Dien Quang Lamp Company, which has recently applied for CE approval, said that his company would begin exporting to the EU when it receives permission to display the CE mark. Mr. Nhuong elaborated, "We have learned that in order to sell products in the EU market, we must gain CE marks for our products, that is why we have applied for CE marking. Besides the purpose of expanding markets, the CE mark also assures consumers of the safety of our products. It means the CE mark brings benefits for both manufacturers and consumers. Actually it makes products more competitive".