Vietnam - MC Grecof

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France occupied all of Vietnam by 1884. Independence was declared after World War II, but the French continued to rule until 1954 when they were defeated by communist forces under Ho Chi MINH, who took control of the north. US economic and military aid to South Vietnam grew through the 1960s in an attempt to bolster the government, but US armed forces were withdrawn following a cease-fire agreement in 1973. Two years later North Vietnamese forces overran the south. Economic reconstruction of the reunited country has proven difficult as aging Communist Party leaders have only grudgingly initiated reforms necessary for a free market.



Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea, alongside China, Laos, and Cambodia


16° 00' N, 106° 00' E

Map references:

SüdostasienSoutheast Asia


total: 329,560 sq km
land: 325,360 sq km
water: 4,200 sq km

Land boundaries:

total: 4,639 km
border countries: Cambodia 1,228 km, China 1,281 km, Laos 2,130 km


3,444 km (excludes islands)

Maritime claims:

contiguous zone: 24 NM
continental shelf: 200 NM or to the edge of the continental margin
exclusive economic zone: 200 NM
territorial sea: 12 NM


tropical in south; monsoonal in north with hot, rainy season (mid-May to mid-September) and warm, dry season (mid-October to mid-March)


low, flat delta in south and north; central highlands; hilly, mountainous in far north and northwest

Elevation extremes:

lowest point: South China Sea 0 m
highest point: Ngoc Linh 3,143 m



79.939.014 (July 2001 est.)


noun: Vietnamese (singular and plural)
adjective: Vietnamese

Ethnic groups:

Vietnamese 85%-90%, Chinese, Hmong, Thai, Khmer, Cham, mountain groups


Buddhist, Hoa Hao, Cao Dai, Christian (predominantly Roman Catholic, some Protestant), indigenous beliefs, Muslim


Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and Khmer; mountain area languages (Mon-Khmer and Malayo-Polynesian)



conventional long form: Socialist Republic of Vietnam
conventional short form: Vietnam
local long form: Cong Hoa Xa Hoi Chu Nghia Viet Nam
local short form: Viet Nam
abbreviation: SRV

Government type:

Communist state



Administrative divisions:

58 provinces (tinh, singular and plural), 3 municipalities* (thu do, singular and plural); An Giang, Bac Giang, Bac Kan, Bac Lieu, Bac Ninh, Ba Ria-Vung Tau, Ben Tre, Binh Dinh, Binh Duong, Binh Phuoc, Binh Thuan, Ca Mau, Can Tho, Cao Bang, Dac Lak, Da Nang, Dong Nai, Dong Thap, Gia Lai, Ha Giang, Hai Duong, Hai Phong*, Ha Nam, Ha Noi*, Ha Tay, Ha Tinh, Hoa Binh, Ho Chi Minh*, Hung Yen, Khanh Hoa, Kien Giang, Kon Tum, Lai Chau, Lam Dong, Lang Son, Lao Cai, Long An, Nam Dinh, Nghe An, Ninh Binh, Ninh Thuan, Phu Tho, Phu Yen, Quang Binh, Quang Nam, Quang Ngai, Quang Ninh, Quang Tri, Soc Trang, Son La, Tay Ninh, Thai Binh, Thai Nguyen, Thanh Hoa, Thua Thien-Hue, Tien Giang, Tra Vinh, Tuyen Quang, Vinh Long, Vinh Phuc, Yen Bai


2 September 1945 (from France)

National holiday:

Independence Day, 2 September (1945)


15 April 1992

Legal system:

based on communist legal theory and French civil law system


18 years of age; universal

Chief of state:  

President Tran Duc LUONG (since 24 September 1997) and Vice President

Executive branch:

Nguyen Thi BINH (since NA October 1992)
head of government: Prime Minister Phan Van KHAI (since 25 September 1997); First Deputy Prime Minister Nguyen Tan DUNG (since 29 September 1997); Deputy Prime Ministers Nguyen Cong TAN (since 29 September 1997), Nguyen Manh CAM (since 29 September 1997), and Pham Gia KHIEM (since 29 September 1997)


Cabinet appointed by the president on the proposal of the prime minister and ratification of the National Assembly


President elected by the National Assembly from among its members for a five-year term; election last held 25 September 1997 (next to be held when National Assembly meets following legislative elections in NA 2002); prime minister appointed by the president from among the members of the National Assembly; deputy prime ministers appointed by the prime minister

Election results:

Tran Duc LUONG elected president; percent of National Assembly vote - NA%

Flag description:

red with a large yellow five-pointed star in the center


Economy - overview:

Vietnam is a poor, densely populated country that has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally planned economy. Substantial progress was achieved from 1986 to 1996 in moving forward from an extremely low starting point - growth averaged around 9% per year from 1993 to 1997. The 1997 Asian financial crisis highlighted the problems existing in the Vietnamese economy but, rather than prompting reform, reaffirmed the government's belief that shifting to a market oriented economy leads to disaster. GDP growth of 8.5% in 1997 fell to 6% in 1998 and 5% in 1999. Growth continued at the moderately strong level of 5.5%, a level that should be matched in 2001. These numbers mask some major difficulties in economic performance. Many domestic industries, including coal, cement, steel, and paper, have reported large stockpiles of inventory and tough competition from more efficient foreign producers; this problem apparently eased in 2000. Foreign direct investment fell dramatically, from $8.3 billion in 1996 to about $1.6 billion in 1999. Meanwhile, Vietnamese authorities have moved slowly in implementing the structural reforms needed to revitalize the economy and produce more competitive, export-driven industries.


food processing, garments, shoes, machine building, mining, cement, chemical fertilizer, glass, tires, oil, coal, steel, paper

Agriculture - products:

paddy rice, corn, potatoes, rubber, soybeans, coffee, tea, bananas, sugar; poultry, pigs; fish


dong (VND)

Currency code:




total: 2,652 km
standard gauge: 166 km 1.435-m gauge
narrow gauge: 2,249 km 1.000-m gauge
dual gauge: 237 km NA-m gauges (three rails) (1998)


total: 93,300 km
paved: 23,418 km
unpaved: 69,882 km (1996)


17,702 km


more than 5,149 km are navigable at all times by vessels up to 1.8 m draft

Ports and harbors::

Nocken Ranh, Da Nang, Haiphong, Ho ChiMinh Stadt, Ha Lang, Quy Nhon, Nha Trang, Vinh, Vung Tau


The tropical belt of the Northern hemisphere, from the 8030 to 23022 North latitude, enjoys very favourable geographic and climate conditions for coffee, which is the key reason for Vietnam's reputation of its specific coffee aromatic flavour.

On the 16014' North latitude Hai Van mountain pass of over 1,000 m high marks the borderline between the North and the South, starting from the end of the North Truong Son range in the South of Thua Thien Hue province, leading toward the sea. The pass acts as a huge wall to prevent the Northeastern monsoon, and split Vietnam into two different climate areas:

- The South spreads south from the pas and includes 3 regions: East Truong Son, Western Highland, and the South-east region; belongs to the hot and moisture tropical climate suitable for Robusta cultivation;

- The North runs north from the pass and includes 4 regions: Viet Bac-Dong Bac, Tay Bac, Thanh-Nghe-Tinh, Binh - Tri - Thien; has milder climate with cold winter and showers, is suitable for Arabica cultivation. The North is now the main land under the plan of Arabica coffee development.

25 years ago the State started to pay sufficient attention to coffee development with the two pilot provinces of DakLak and Gia Lai-Kontum on the Western Highland. The actual area under coffee in Vietnam at that time was merely less than 20,000 ha of low productive coffee with the annual output of approximately 4,000 or 5,000 ton. By the year 2000 Vietnam have developed to 500,000 ha under healthy and high productive coffee that brings about more than 800,000 tons each year. Such a dramatic development is far beyond the initiatives, objectives and strategy of the industry. It is very clear that the total coffee area actually start its hasty growth since mid-1980s. In 1992 international coffee prices sank to its bottom as all producers sold out their stocks that had been retained under the strict export quota policy set by the ICO. After the difficult year coffee prices quickly recovered and gained its peak in 1994 and 1995. Realising the huge profit from coffee Vietnamese people of different levels from farmer to officer and from provinces and cities rushed to buy land for coffee plantations. And as a result area and production gradually increased and have amazingly boomed to the record highs in the last few years. The development was under the regulation of the market and beyond the government's control and targets.

The soaring of both area and output figures in the following table can indicate the rapid development of Vietnam coffee industry over the last 9 crop years:

Crop year


Area (ha)


Output (ton)



After 1975, when Vietnam started to pay substantial attention to coffee, there were merely a few small rusty and patchy processing stations. In the North, we had two in Dong Giao district and Phu Quy district, which were German-made and installed since 1960 or 1962. In the South, a number of stations belonging to old trade farms namely Rossi, Delphante still remained but with low capacity. Along with the decision to expand coffee growing area, Vietnam have been setting up a series of new processing stations, beginning with some separate equipment and then with local made production lines copied from designs of Hangxa group like in Machinery Factory 1/5 of Hai Phong City, Factory A74 of Ministry of Industry in Thu Duc district, Ho Chi Minh City... And recently a number of advanced and complete stations were built up by companies and farms with equipment imported from Germany and Brazil, and a series of over 10 production lines was imported from Brazil?s Pinhalense Manufacture. Now there are some assembly workshops for local made machinery copied and advanced from Brazil?s designs.

The processing capacity of each station which was built within the last 5 to 7 years with advanced and high quality equipment is estimated at approximately 150,000 to 200,000 tons of green bean for export per year. Besides, there are several reprocessing stations which are mainly equipped with separate machines to reprocess the preliminary-processed coffee gathered from farmers in order to comply with export quality standards. In households, coffee cherry is harvested and treated separately by sun drying on cement yards or merely on the ground, and then hurled by small hurling machines before being gathered by agencies and stations. This practice of processing leads to unsteady quality. Meanwhile, coffee produced by companies and farms such as Thang Loi Coffee Company, Phuoc An Coffee Company, and Viet Duc Company etc. is highly ranked by foreign customers, especially in term of appearance and quality. For many years Vietnam?s exporters have sold coffee on the normal and simple terms and conditions as agreed in the contracts, with no reference to the State Quality Standards, which as a result creates no intension and encouragement for the improvement of processed coffee quality and processing technology.

But there currently appears a new trend in this price depression situation as customers have the rights to request higher and higher quality, and Vietnam is now encountering new challenges of processing technology. In addition to customers' requirements of higher quality, there are arising a numbers of important issues, including:

- The Association of Coffee Producing Country (ACPC) approved the proposal of Central American producing countries to eliminate a proportion of coffee of lower quality from the world market, and took this as one efficient measure to balance supply and demand.

- EU members are expected to start applying the new and stricter restriction level of Ochratoxin A contamination for coffee on January 01, 2003, and by this step keep a big quantity of contaminated coffee out from the world market.

Vietnam coffee, thus, has to make a radical change to the processing industry in order to keep its existence and its sustainable development.
A major part of Vietnam coffee production currently belongs to Robusta and dry processing is the most common. After harvesting, farmers make full use of sunlight for drying coffee. In cases of long and continual rains during harvesting season, people have to use drying rooms powered with coals or firewood? There are just a small number of coffee enterprises using wet processing but without soaking or fermenting and using mechanical methods for mucilage removing instead. And for the small part belonging to Arabica coffee, State owned enterprises usually use wet processing. The equipment and production lines are mainly imported from Brazil, some from Germany? The Sortex color sorter is really popular in Vietnam as well.

Under the program approved by the Ministries, the Technical Committee TCVN/TC/F16 on Coffee and Coffee products led by Vietnam Coffee - Cocoa Association finally completed the revisions of several Vietnam standards on coffee, which were then considered and submitted by the General Department of Standards, Measurement and Quality to the Ministry of Science, Technology and Environment for approval. On November 05, 2001, the Minister of Science, Technology and Environment made the Decision No. 57/2001/QÐ-KHCNMT to approve and introduce the 5 coffee standards, including:

1/ TCVN 4193:2001   Green coffee - Specification
(The 3rd revision - substitution for TCVN 4193 : 1993)
2/ TCVN 4334:2001 (ISO 3509 -1989) Coffee and its products - Vocabulary
(The 1st revision - substitution for TCVN 4334-86)
3/ TCVN 4807:2001 (ISO4150-1991) Green coffee - Size analysis - Manual sieving
(The 2nd revision - substitution for TCVN 4807-89)
4/ TCVN 6928:2001 (ISO 6673-1983) Green coffee - Determination of loss in mass at 150oC
5/ TCVN 6929:2001 (ISO 9116-1992)  
Of the 5 new Vietnam Standards, TCVN 4193 : 2001 provides radical changes to coffee grading system, replacing the traditional method based on some simple criteria by an internationally overwhelming defect counting system.

New Standard


TCVN 4193:2001


Green coffee - Specification
(The 3rd revision - substitution for TCVN 4193 : 1993)


TCVN 4334:2001

(ISO 3509 -1989)

Coffee and its products - Vocabulary
(The 1st revision - substitution for TCVN 4334-86)


TCVN 4807:2001


Green coffee - Size analysis - Manual sieving
(The 2nd revision - substitution for TCVN 4807-89)


TCVN 6928:2001

(ISO 6673-1983)

Green coffee - Determination of loss in mass at 150oC


TCVN 6929:2001

(ISO 9116-1992)


Of the 5 new Vietnam Standards, TCVN 4193 : 2001 provides radical changes to coffee grading system, replacing the traditional method based on some simple criteria by an internationally overwhelming defect counting system.


For the past 20 years, Vietnam coffee industry has gains substantial achievements with its annual production increasing hundreds times, about which much has been discussed. The reasons for such achievements have also been defined, and firstly thank to the renovation policy of the State in line with the desires of farmers of earning their life on their own land and basing on their own hard-workingness. Regarding objective reasons, we should note that coffee prices were moving in a good way for producers, the price continually increased and as a result farmers? income substantially rose. It is the main reason for the rapid development of Vietnam coffee industry. And the adverse influence of such a dramatic development is the over enlargement of coffee area that is currently beyond the control of the coffee industry.

The foremost objectives of coffee industry set forth in 1980 with the target of bringing the total area under coffee to the number of 180,000 ha and with the annual production of 200,000 tons.
After some adjustments the figure merely reached 350,000 and then 450,000 ha.
The actual situation is not up to anyone?s predictions; the 2000?s survey showed that the figure had reached 520,000 ha with the production of approximately 900,000 tons. This figure came to the surprise of many people, even senior experts of Vietnam coffee were of no exception. And it is accused to have made a notable contribution to the current over-production of the coffee world, and consequently, to the drop of the world prices toward the record low over the last few decades.
Taking into account the development of Vietnam coffee over the last 7 crop years from 1995/96 till 2000/01 we can find a surprisingly rapid growth in term of exports and a contrary trend for export prices:

Crop Year


Export (ha)


Average Price (USD/MT)


For the crops before 1998/99 the annual growth of coffee exports was not very high but in the two crops 1999/00 and 2000/01 export increased by 200,000 tons each, i.e. by 3.5 million bags. And the export prices for the two crops dropped to the disastrous low with each crop?s price equal to approximately 60% of the previous crop. Vietnam?s FOB slipped down to USD 380,8/ton in the 3rd quarter of 2001, and to USD 321/ton by the 4th quarter, equivalent to just a half of production cost. Farmers, thus, are now facing a series of difficulties and many will not be able to keep on bearing if the situation lasts longer, and this shall lead to an indispensable result of reluctances of any care for the plantations as well as harvesting work, that in its turn leads to coffee degradation, and to coffee uprooting and replacing by other crops.
In such a situation, since 2000 Vietnamese Government has been taken a series of actions to help farmers overcome current difficulties including financial efforts of mobilization from the State budget to purchase coffee at reasonable prices for its own retention plan; releasing agriculture taxes for land under coffee; lengthening loans; providing soft loans for maintenances of coffee plantations or replacement by other crops etc.
These considerations paid from the Government are warmly welcome by coffee farmers and by the whole coffee industry as well.
However the financial capacity of Vietnam is limited, that leads to several difficulties. The utmost importance is that the Government has worked out a concrete orientation for the coffee industry, and the adjustment of such an orientation is now considered of high importance to the development of Vietnam coffee industry. The current oversupply has adversely influenced the industry, yet there are good effects in some aspects. E.g. in no better situation than such a depressed situation can coffee people realize their remaining backwardness, and draw out a more corrective orientation.


Coffee is currently seen as the second key agriculture product in Vietnam after rice. Its export revenue accounts for approximately 10% out of the total annual export value of the country. In crop year 2000/01 Vietnam coffee was exported to more than 60 countries and territories, of which the top and traditional consumers are:
Top 10 consumers of Vietnam coffee




United Kingdom
South Korea

Volume (ton)


Value (USD)


Percentage per total exports to all destinations (%)

Area and production of the whole country belongs to State-owned enterprises, including central level and provincial level ones. The major part of 85-90% belongs to small households or farm owners with plantations of normally from 2 to 5 ha under coffee. There are some farmers owning bigger plantations of 30 to 50 ha but actually not many.

The State owned Vietnam National Coffee Corporation (VINACAFE) is the biggest member of VICOFA, operates in large-scale with over 60 member companies, enterprises, farms? VINACAFE annually exports more than 20-25% the total coffee production of the whole country.
There are other companies and enterprises located in DakLak, Gia Lai, Lam Dong, Dong Nai, Phu Yen, Binh Duong Province, Ba Ria- Vung Tau City, Ho Chi Minh City, Hanoi, Son La, Yen Bai, Lai Chau, Thanh Hoa, Nghe An, Quang Tri Province etc. and engaged in Robusta and Arabica production and export.

According to the VICOFA'
s report for crop year 2000/01 (from October 2000 till September 2001) the export by 44 VICOFA's Members reported frequently to the Association reached 744,451.94 tons, or 81.11% out of the total 874,676 tons exported by 149 exporters of Vietnam. Of the 149 export companies 78 are VICOFA's full Members taking the volume of 793.363 tons, i.e. 90,7%, and the remaining 71 are non-members with the volume of 81.313 ton, i.e. 10,3%.
With the total area currently in excess of 500,000 ha, with the annual production of over 10 million bags, coffee is ranked the second after rice in the list of agriculture exports from Vietnam. And with such half a million hectares, the coffee industry attracts approximately 300,000 households with over 600,000 farmers and workers, which may soars to 700,000 or 800,000 during the three months of harvesting period, making up for approximately 1.83% of the total labor force across the country and 2.93% of the agriculture labor force.

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