Vietnam’s tea industry is ready to reach out to the world market

On 18 December, Ministry of Agriculture and Rural Development, Vietnam Tea Association and The Sustainable Trade Initiative IDH co-organized Conference on reviewing Tea Industry in 2020 and 5 years of Public – Private Partnership (PPP) program for sustainable development of Tea Industry” in Hanoi.

According to the report of Vietnam Tea Association, world tea market recorded multiple unstable developments due to the negative impacts of Covid – 19. China’s tea exports remain stable despite signs of modest production growth compared to recent years.

Sri Lanka has announced its new promotion campaign on “Ceylon Black Tea” under the Lion symbol in 13 countries including Russia, Ukraine, Japan, China, German, Chile, Turkey, Iran, USA, Australia and Saudi Arabia.

Vietnam’s tea production in the first 11 months of 2020 reached 175,000 tons, estimated to gain 180,000 tons for the entire year. Export via official channels in 11 months was 124,000 tons, up 1.3% against the same period in 2019, estimated to reach 135,000 tons for the whole year while unofficial export is estimated to amount 10,000 tons for whole year.

Annual domestic consumption is estimated to remain at 45,000 tons. Vietnam’s 2020 tea product structure: black tea 51%, green tea 48% and 1% for others.

Tea export turnover in 11 months reached US$ 201 million, down 5.5% over same period in 2019. It is estimated that turnover for entire year will reach US$ 220 million. Average export price in 11 months was US$ 1,621/ton, down 7.4% over same period last year (US$ 1,750/ton).

Domestic consumption price averaged VND 150,000/kg, equivalent to US$ 7,000/ton. Revenue from domestic consumption was VND 7,245 billion, equivalent to US$ 315 million. Revenue from unofficial export gained US$ 17 million and total revenue of the industry reached US$ 552 million.

Under the common goal: “Developing towards sustainability through enhancing public – private partnership and coordinating resources of members”, after 5 years of implementation, PPP program for sustainable development of tea industry has achieved multiple positive progresses.

In the 2019 – 2020 period, PPP program has officially issued its operation regulation and plan to 2020 in June 2019, thereby established PPP Technical Assistance Group for Vietnamese tea including representatives of Crop Production and Plant Protection Departments, IDH, Unilever, URC and Vietnam Tea Association.

Then IDH was additionally elected as a co – chair representing non – governmental entities of the Working Group so as to grasp opportunities for connection and fund raising for Group projects. Crop Production Department and Unilever continued to be co – chairs for public sector and private sector respectively, Vietnam Tea Association remained its role as secretary. 

In addition, PPP program has strengthened the role and participation of Association members. Besides consenting to the operation plan and solving common issues of the industry, PPP program has created a forum for member companies to share lessons, connect networks and develop tea industry.

According to Vietnam Tea Association, the overall goal of PPP program for the 2021 – 2025 period will be aiming at strict management for the sustainable use of pesticides in Vietnam tea industry and improving supply chain efficiency and the quality of Vietnamese tea products through enhancing the effectiveness of PPP group.

Mr. Nguyen Quy Duong, Deputy Director of Plant Protection Department said, during the past 5 years, under the role of state management in plant protection, food safety and agricultural materials, the Plant Protection Department has joined PPP group of tea industry. Together with Vietnam Tea Association and 12 companies, the Plant Protection Department has established teams specialized in plant protection.

“In the past, people used some pesticides that are not allowed to use for tea trees. Our teams are tasked to train people how to use pesticides following 4 principles, how to control residues, how to identify pesticides that are allowed to use for tea trees. The ultimate goal is to ensure the quality of tea products and food hygiene and safety for export”, shared Mr. Duong.

Vietnam currently ranks 5th in the world for tea exports, 7th for global tea production. Vietnamese tea products have been exported to 74 countries and territories.

Up to now, Vietnam has 34 provinces and cities growing tea with a total area of 123,000 hectares.

In the past 3 years, Vietnam exported 130,000 tons of tea, reaching US$ 200 million per year.