The UK-Vietnam Free Trade Agreement (UKVFTA) has entered its second year of implementation and is supporting the Vietnam's coffee industry to expand its market share in the UK.

According to the General Department of Customs, coffee exports to the UK market are effectively taking advantage of the bilateral free trade agreement. In the first eight months of 2022, coffee exports to the UK market reached 34.68 thousand tons, worth USD 70.68 million, an increase of 57.9% in volume and an increase of 84.2% in value over the same period in 2021.

Not only increased sharply in volume, the price of coffee exported to the UK also improved sharply. In the past eight months, the average export price of Vietnam's coffee to the UK reached USD 2,038/ton, an increase of 16.6% over the same period in 2021.

Vietnam exports three types of coffee to the UK, including: Robusta, Arabica and processed coffee. In which, the export of Robusta coffee to the UK reached over 31,000 tons, worth USD 61 million, an increase of 80.7% in volume and an increase of 117.8% in value over the same period in 2021; export of Arabica coffee reached 162 tons, worth USD 701,000, an increase of 1,295.9% in volume and an increase of 1,199% in value; processed coffee exports reached USD 4.16 million, an increase of 12.3%.

According to statistics from ITC, in June 2022, the UK imported 20.47 thousand tons of coffee, worth USD 110 million, a decrease of 13.3% in volume and a decrease of 5.6% in value compared to May 2022, but compared to June 2021, an increase of 18.8% in volume and an increase of 44.2% in value.

Accumulated over the first six months of 2022, the UK imported nearly 136 thousand tons of coffee, worth USD 716.27 million, an increase of 35.3% in volume and 67.9% in value over the same period in 2021.

Vietnam's coffee market share in total UK imports increased sharply from 16.33% in the first six months of 2021 to 29.92% in the first six months of 2022.

The Ministry of Industry and Trade affirmed that the UK - Vietnam Free Trade Agreement (UKVFTA) has entered its second year of implementation, which is supporting the Vietnam's coffee industry to expand its market share in the UK.

According to the commitment of UKVFTA, after six years from the date of entry into force of the UKVFTA agreement, the UK will eliminate import taxes on 99.2% of tariff lines, equivalent to 99.7% of Vietnam's export turnover.

Coffee is one of the agricultural products with high export results over the eight months, with an output of 1.24 million tons, worth USD 2.82 billion, an increase of 14.7% in volume and an increase of 39.6% in value compared to the same period in 2021. It is expected that by the end of September, coffee export turnover will exceed USD 3.07 billion last year.

Coffee export prices have increased significantly since the beginning of the year. Due to the fear of supply shortage, the price of coffee both in the country and in the world market increased to a record high level. In August 2022, the average export price of Vietnam's coffee is estimated at USD 2,336 per ton, increased by 1.6% compared to July 2022 and increased by 16.1% compared to August 2021.

Over the first eight months of 2022, the average export price of Vietnam's coffee is estimated at USD 2,268 per ton, an increase of 21.7% over the same period in 2021.

Kylie Nguyen