Competition

Export competition and substitution

In the export market, Vietnam faces competition based on two inherent aspects of the Robusta coffee trade. First it is much more generic product than washed Arabica, an consequently, one country of origin can easily be substituted for another when a preferred origin is unavailable or too expensive.

Second, Robusta is subject to competition from other countries in two ways. In periods when the price difference between Arabica and Robusta widens, Roasters may seek kto reduce their Arabica usage and increase Robusta usage. The second form of this is that as the price of Arabica falls relatively to the price of a basket of Arabica and Robusta Coffee, there will be a tendency of roaster to lower both their washed Arabica and their Robusta usage in favor of more natural Arabica.
Vietnam share of total Robusta export has consistently increased in most of the last 12 years compared to its major competitors. Even when accounting for the Robusta component of soluble exports from competing countries, Vietnam had a 40% market share.
In many traditional EUR market, the expansion of imports from Vietnam almost exactly match the increase in Robusta imports overall.

COMMERCIAL PRACTICES
Vietnam Coffee export to the U.S could not reach to the direct importers. Most of the big coffee corporations / traders have their purchasing offices in Vietnam. Vietnam exporters have to sell their product these Roasters because the importers prefer to use multinational traders because they can better assure specified quality, volume, and delivery schedules. Big Vietnamese exporters like Vinacafe though very big in term of volume still can not find a way to sell their coffee directly to roasters.

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