Indonesia loses out to Vietnam in coffee exports

Indonesia loses out to Vietnam in coffee exports

TOKYO (Reuter): Japan, the world's third largest coffee importer after the United States and Germany, is accelerating imports from emerging producer Vietnam at the expense of Indonesia, traders said yesterday.

Local traders said shipments from Vietnam would be further stepped up with the re-establishment of full diplomatic ties between the United States and Vietnam.

Japan imported 121,625 tons of green coffee for the first five months of calendar 1995, according to data from the Ministry of Finance.

Bean shipments from Vietnam reached 8,406 tons, sharply up from 4,635 tons a year earlier.

"We'll depend more on Vietnam due to its growing coffee production and price competitiveness," a Japanese trader said.

Between January and June 1995, the largest coffee exporter to Japan was Brazil, which shipped 30,780 tons, followed by Colombia with 24,341 tons and Indonesia with 14,201 tons.

Japan's coffee industry imports both robusta and arabica varieties from overseas producers. The arabicas come mainly from Latin America and Africa and the robusta mainly from Indonesia, industry officials said.

"Indonesia has been major robusta coffee supplier. But Vietnam is now stepping up its presence in the Japanese market, reducing Indonesia's export share," another trader said.

Indonesia's green coffee exports to Japan for the first half of 1995 plunged to 14,201 tons, from 19,917 tons a year earlier, the MOF data said.

U.S. ties

Last Tuesday, U.S. President Bill Clinton announced the normalization of diplomatic relations with Hanoi. Vietnam also will formally join the Association of South East Asian Nations this summer.

"We have been reluctant to buy Vietnamese coffee, partly because Washington hesitated to trade with Hanoi," a major trading house official said. "But the full diplomatic ties will boost Vietnamese commodity exports to Japan as well."

Vietnam's coffee output for the 1994/95 crop year is forecast at 180,000 tons. It exported 115,000 tons of coffee for the first half of calendar 1995, up 25.4 percent from a year earlier, according to Vietnamese figures.

Japanese traders said Vietnamese coffee's major competitive advantage against Indonesia was its lower export price.

"In some cases Indonesian coffee is more expensive than African. So it's logical for Japanese traders to rely on Vietnam although its coffee quality may sometimes be inferior," the trader said.

Vietnam enjoys a trade surplus with Japan, with exports totaling about US$1.4 billion in 1994. Vietnam's imports from Japan in 1994 were $643 million, the government-affiliated Japan External Trade Organization said.