Coffee Industry in Vietnam - Case Study Example

Initially, coffee industry was run by government. The total area under coffee production in 1995 was 186,400 hectares and increased to 535,100 hectares by 2002. The coffee type mainly grown in Vietnam is Robusta, a relatively low quality coffee in comparison to Arabia. But Vietnam's coffee is of high quality and planted on mountainous areas because of "a large range of temperature between day and night and basaltic soil" (Sinh, Sutcliffe, and Van, 1999, p.68). The coffee produced in Boun Ma Thout is widely accepted by the customers due to its improved quality.

In order to get a clear cut idea and gain a better understanding over the coffee industry in Vietnam, it is necessary to draw a dividing line over the periods of coffee industry in Vietnam stretching from 1996-97 to 1999-2000. During the first period, i.e. 1996-1997 due to the high price, coffee farmers were inspired to cultivate it more while the second period brought them to the world coffee market when it reached its peak level in 2001 as their domestic coffee demand was static. During this time, government brought the country's coffee industry to the highland regions and took effective production and export oriented programs.

Boun Ma Thout Coffee Festival of 2005 was a turning point for Vietnamese coffee industry. In this festival, Hanoians came to see the entire process of coffee production - planting, harvesting, drying, roasting and grinding. Subsequent to this, they came to enjoy cup coffee. Such festivals have opened the doors for all to be familiar with coffee culture and at the same time help developing it. Current Scenario Mainly grown coffee type in Vietnam is Robusta. It grows in plenty in highland regions of Vietnam.

Robusta has a relatively less potential to be affected by diseases and it needs less water supply. As the Vietnam began to earn huge currencies through importing this improved quality coffee at much higher rate, the policy makers tempted the farmers to cultivate it more. As a consequence of this, the farmers became somewhat blind to the coffee cultivation and began to cut down tropical trees along with other trees. As a result, at the end of late 1990s, the world coffee price fall down only because of Vietnamese overproduction.

Restlessness of market price and the condition ordained on them let them facing a serious financial hardship. However, this led coffee farmers neglect densely planted "dollar trees" (Greenfield, March 2004) too. Again use of chemical fertilizer instead of organic fertilizer quickly fertilized and increased coffee production and ultimately affects on the long run fertilization. StandardizationThere is an urgent necessity to take proper initiatives for making the proper standardization of coffee industry for ensuring its perfection and better quality.

Sinh, Sutcliffe, and Van (1999) states that- "General Department of Quality Control, the Polytechnic University, and the Department of Science, Technology and Quality Control and after reviewing the coffee standards of ISO and some countries such as Indonesia, Brazil, and the Standardization Committee of Vietnam Coffee Corporation (VINACAFE) has developed standards