In this paper three indexes were used to evaluate competitiveness of Vietnam coffee industry and its recent trend. We showed that Vietnam coffee has comparative advantages compared with other exports from Vietnam and with coffee product in the world as well. | UEH-JED February 2012 | 53 Competitiveness of Vietnam Coffee Industry and its Trend NGUYỄN VĂN HOÁ* & TRẦN ĐÌNH LÝ** ABSTRACT In this paper, three indexes were used to evaluate competitiveness of Vietnam coffee industry and its recent trend. We showed that Vietnam coffee has comparative advantages compared with other exports from Vietnam and with coffee product in the world as well. The increase in RCA index of Vietnam coffee implies the relative advantages in coffee production of Vietnam gradually rise. The DRC curve being below the exchange rate line reconfirms the increase in these advantages. This fact means Vietnam can save foreign currencies efficiently by investing in production of coffee for exports. However, the UV index shows that quality of Vietnam’s coffee is low in comparison with coffee products from other exporters such as Indonesia in ASEAN or Brazil, Columbia and Costa Rica in the South America. The decreasing quality of Vietnamese coffee shows that there is a trade off between comparative advantages and quality-based competitiveness in coffee production of Vietnam. Keywords: Vietnam, coffee, comparative advantages, competitiveness, RCA, DRC, UV. 1. PROBLEM Coffee area in Vietnam has increased quickly in recent years to some 500,000 hectares with an average output of 900,000 tonnes a year. Vietnam ranked fourth among the world’s leading exporters of coffee in 1988 and second in 2011 with coffee products sold to 71 countries and territories and an average export revenue of US$2 billion a year. Thus, coffee plays an important role in Vietnam’s agricultural production, creates direct jobs for thousands of workers and indirect jobs for millions of laborers, and provides income for numerous families, especially ones of ethnic minorities. However, coffee production and processing in Vietnam reveal various weaknesses that reduce coffee quality and competitiveness in comparison with products from the world’s leading coffee producers. Studying .
