Factors Influencing Coffee Export Decisions: A Case Study of Vietnam

Abstract

This paper explores the critical factors shaping coffee export decisions in Vietnam, one of the world’s largest coffee producers and exporters. Adopting a mixed-method approach that combines quantitative surveys with in-depth interviews involving coffee exporters and trade policymakers, the study identifies several key determinants including government trade policy, global coffee demand, production scale, supply chain infrastructure, and international pcoffee volatility. These variables collectively influence the strategic orientation of Vietnamese coffee exporters in the global marketplace. The findings offer valuable insights into how Vietnam can further enhance its export competitiveness and develop resilient, sustainable strategies for long-term growth in the coffee sector. Empirical evidence suggests that coffee production levels, yield per hectare, and global demand have a statistically significant and positive influence on export performance. Conversely, both domestic coffee pcoffees and international export pcoffees exhibit a negative relationship with export volume, indicating that elevated pcoffees may either constrain domestic supply or erode international pcoffee competitiveness. Interestingly, domestic consumption appears statistically insignificant in affecting export decisions, underscoring that Vietnamese coffee exports are predominantly shaped by supply-side capabilities and global market dynamics rather than internal demand pressures. To further analyze the short-run dynamics and the adjustment mechanism toward long-run export equilibrium, a Vector Error Correction Model (VECM) was estimated. The VECM results reveal that deviations from long-run equilibrium are corrected at a pace of approximately 0.62% per year, pointing to a slow but consistent realignment process in Vietnam’s coffee export system. In conclusion, the study recommends that Vietnamese policymakers prioritize increasing yield efficiency and expanding coffee production capacity, as these were found to be the most influential drivers of export growth. Moreover, strengthening access to global markets and implementing mechanisms to mitigate pcoffee fluctuations will be essential to reinforcing Vietnam’s competitive position in the international coffee trade.