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Vietnam’s coffee challenges Brazil for top market slot in Japan
Nguyen Tung 19:21, 2019/03/26
During the first 11 months of 2018, Vietnam supplied 25% of Japan`s imported coffee products, compared with 27% from Brazil, which saw its Japanese exports fall 7% year on year over the same period.
Vietnam is making its presence felt in Japan's vibrant coffee sector, as the world's second-largest coffee producer leverages its proximity and low-priced beans to close in on market-leader Brazil, according to Nikkei Asian Review. 
 
Illustrative photo.
Illustrative photo.
During the first 11 months of 2018, Vietnam supplied 25% of Japan's imported coffee products, compared with 27% from Brazil, which saw its Japanese exports fall 7% year on year over the same period.

Most of Vietnam's coffee beans are of the Robusta variety, known for being relatively easy to grow and resistant to disease and pests -- qualities that ensure stable crops. The beans make for a heady, somewhat bitter coffee in contrast to Brazil's more costly Arabica beans, which tend to have a sweeter, softer flavor.

Toyohide Nishino, executive director of the All Japan Coffee Fair Trade Association, told Nikkei Asian Review that Japanese consumer thirst for good tasting, low-priced coffee is driving Robusta's market share.

Japan imported 88,000 tons of unroasted coffee beans from Vietnam in all of 2017 -- a tenfold jump from a decade before -- and surged 15% year on year to 94,000 tons in the 2018 January-November period alone.

Robusta beans are currently trading at around US$0.68 per pound, 30% less than that of Arabica, which go for about US$1.03 per pound (0.45 kg). Moreover, prices for Robusta have been trending down since last year due to expectations of higher global production.

According to Nikkei Asian Review, proximity gives Vietnam and its Robusta beans an advantage in the Japanese market, since shipping from Vietnam or other regional producers takes only about half as long as Arabica coming from Latin America. And among Southeast Asian coffee producers, Vietnam's larger production base offers a more stable supply than, for example, Indonesia.

Vietnam is looking to expand market share by increasing bean yields per tree. As a result, Vietnam's coffee production in fiscal 2018 grew 4% year on year to a record 30.4 million 60-kg bags, according to the U.S. Department of Agriculture.

Domestic demand is also fueling Vietnam's coffee output, with coffee shops now the favored hangouts for young people and three-in-one mixes of instant coffee, sugar and powdered milk a favorite with workers.

​Meanwhile, even though Japanese demand for Arabica coffee remains solid, Vietnam will be a beneficiary of a market increasingly polarized on the high- and low-end segments, says Shiro Ozawa, an adviser for Tokyo-based specialty coffee trader Wataru and Co.
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