Prime Minister urges to facilitate medicinal materials exports.

In recent times, the media has reflected difficulties in exporting some medicinal materials, affecting the production and business activities of many enterprises. In addition to the market difficulties and price reductions, there are also obstacles in implementing some regulations of the Ministry of Health in Circular No. 48/2018/TT-BYT dated December 28, 2018, and Circular No. 03/2021/TT-BYT dated March 4, 2021.

To promptly address the difficulties hindering the export of medicinal materials and drive business activities in this sector, the Prime Minister has instructed:

The Ministry of Health, in its functions, duties, and delegated authority, to lead and coordinate urgently with the Ministry of Finance and relevant agencies to review, study, amend, and improve the regulations regarding the export and import of medicinal materials; ensure the swift resolution of obstacles and create conditions for business activities according to regulations. The revision of these regulations should be completed by April 25, 2024.

Earlier, on February 1, the Vietnam Pepper Association (VPSA) sent a letter of recommendation to the Ministry of Health, the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, the General Department of Customs, and the Traditional Medicine Administration regarding the recommendation to resolve export difficulties in cinnamon essential oils.

According to VPSA, in recent times, some enterprises have encountered difficulties in exporting distilled essential oils from spices, especially cinnamon essential oil, due to the regulations in Circular No. 48/2018/TT-BYT dated December 28, 2018, of the Ministry of Health on the list of medicinal materials; substances extracted from medicinal materials, medicinal oils, traditional medicines, and medicinal herbs for export and import identified by commodity codes according to the list of goods imported and exported by Vietnam.

The requirement that all types of essential oils must comply with the regulations on the trade of medicinal materials will create many difficulties, which are not suitable for the production conditions, products, and market demand as well as the small-scale processing capacity of the Vietnamese cinnamon essential oil processing industry at present. Therefore, this results in additional costs, requiring additional conditional business licenses, while these are agricultural products with low-profit margins.

Cinnamon essential oil products require processing technology and add value to the product, which is the total income of the cinnamon tree (trimmed branches with a high production rate, 150 tons of branches yield 1 ton of essential oil) and is not used as medicine but only exported as raw materials for food and beverages as required by the import market.

On March 4, 2021, the Ministry of Health issued Circular No. 03/2021/TT-BYT regarding the partial removal of provisions in Annex 1 accompanying Circular No. 48/2018/TT-BYT, which regulates the identification of codes for medicinal extracts, essential oils, traditional medicines, and medicinal materials for export and import in Vietnam.

Specifically, some items such as oranges, ginger, lemons, basil, cinnamon leaves, and cinnamon bark were removed from the list, while corresponding essential oils were not. Consequently, our focus has been primarily on raw exports without encouraging processing to increase the value of goods before export, and not utilizing 100% of the value of cinnamon products. In response to the issues regarding export regulations mentioned above, on April 2, the Vietnam Pepper and Spice Association (VPSA) submitted a proposal to the Government Office.

Mr. Ha Sy Huan, Director of the Department of Agriculture and Rural Development of Bac Kan Province, stated that the project to develop the cultivation of precious medicinal herbs in Ba Be district is a closely-knit collaboration model involving local residents, businesses, cooperatives, and implementing units. The project aims to establish a factory for on-site processing, thereby creating high-quality products to meet market demand. The closed-loop process from cultivation to on-site processing will also help local residents reduce dependency on middlemen.