Where is the position of Vietnamese tea stand in major markets around the world?

VCN - Factors causing Vietnam's tea exports to decrease significantly in 2023 are weak market demand and increasingly strict regulations in Vietnam's tea import markets.
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Factors causing Vietnam's tea exports to decrease significantly in 2023 are weak market demand and increasingly strict regulations in Vietnam's tea import markets.
Factors causing Vietnam's tea exports to decrease significantly in 2023 are weak market demand and increasingly strict regulations in Vietnam's tea import markets.

Tea exports are mainly in raw form

The Import-Export Department (Ministry of Industry and Trade) informed that in 2023, tea exports are estimated to reach 121 thousand tons, worth USD 211 million, down 16.9% in volume and 10.9% in value compared to 2022. The average export price of tea in 2023 is estimated to reach USD 1,737.3/ton, up 7.3% compared to 2022.

The main factors causing Vietnam's tea exports to decrease significantly in 2023 are weak market demand and increasingly strict regulations in Vietnam's tea import markets. In addition, Vietnam's current export tea is mainly in raw form with low processing content.

Most exported tea products tend to decrease in the first 11 months of 2023, leading in volume and value is green tea reaching 52.6 thousand tons, worth USD 104 million, down 6.9% in terms of quantity and decrease 1% in value compared to the same period in 2022; Next is black tea with 42.2 thousand tons, worth USD 57.2 million, down 16.1% in volume and 18.4% in value; flower-marinated tea reached 3.5 thousand tons, worth USD 7.3 million, down 4.7% in volume but up 6.7% in value.

Notably, tea exports reached 1.1 thousand tons, worth USD 3.5 million, up 101.8% in volume and 106.5% in value over the same period in 2022.

Assessing the market, the Import-Export Department said that most of the tea import value in major markets in the world from Vietnam accounts for a low proportion. Therefore, even though market demand is weak, Vietnam's tea industry still has the opportunity to expand its market share.

According to the Import-Export Department, to boost exports to major markets in the world, Vietnam's tea industry must promote tea production in a safe direction; encourage tea production enterprises to apply high technology, biology, and organic agricultural production; support tea growers to link production with product processing and consumption; support businesses in promoting trade and finding markets for tea products; diversify products, focusing on rapidly increasing the proportion of high-value products and new products...

Great market exploitation potential

Regarding the EU market, because of climatic conditions, the EU does not produce tea and is completely dependent on importing this product from other countries, so the EU is the largest tea import market globally.

Data from the European Statistics Agency shows that in the first 9 months of 2023 alone, EU tea imports reached USD 826 million, down 8.6% over the same period in 2022, of which the value of EU tea imports EU from Vietnam accounts for only 0.22% of total import value.

The potential for exporting tea to the EU market is considered very positive, especially since the Vietnam-EU Free Trade Agreement (EVFTA) was implemented. Accordingly, tea is one of the products that will enjoy preferential tax rates immediately after the EVFTA Agreement takes effect, bringing great competitive advantage to Vietnam's tea industry.

However, the Import-Export Department analyzed that tea exports to the EU are still not as expected; non-tariff measures such as animal and plant quarantine measures (SPS) or technical barriers to trade ( TBT) are still a challenge for agricultural products, including tea.

Therefore, to effectively take advantage of tariff advantages from the EVFTA Agreement while overcoming technical barriers of this market, the tea industry needs to continue to change production, planting and harvesting methods according to standards of agricultural practice standards, aiming for green and sustainable production criteria to meet strict quarantine requirements.

For the Pakistani market, according to statistics from the Pakistan Tea Association, in the first 11 months of 2023, Pakistan's tea imports into this market reached USD 507 million, down 7.2% over the same period in 2022. Situation of Pakistan's economy faces many difficulties, causing domestic demand to decrease.

In the supply market structure, Pakistan's import value from Vietnam which accounts for only 1.23% of the total import value is still very low compared to market demand, so the opportunity to increase market share is still left open.

In addition, according to the Import-Export Department, tea import markets such as the United States, England and Hong Kong (China) are also very potential for Vietnamese tea export enterprises to expand their market share.

For the US market, tea manufacturing and exporting businesses need to invest more deeply in developing the tea industry value chain, especially paying close attention to food hygiene and safety issues. In addition, Vietnamese export businesses need to pay attention to learning and updating US regulations, especially regulations that affect market access such as regulations on trade defense and sanitation of epidemic prevention, technical standards, origin or regulations related to labor use standards...

As for the British market, this is a market with strict standards for imported goods, especially for agricultural products. For tea products, the UK always pays attention to green standards and sustainable development. In particular, imported agricultural products are only allowed to clear customs if their chemical residue levels are below the maximum allowable threshold.

Therefore, to ensure product quality, it is necessary to raise awareness among producers in limiting the use of fertilizers and chemicals, and farming processes must demonstrate responsibility to society and consumers. .

To export tea to the Hong Kong market (China), the Import-Export Department recommends that businesses should pay attention to the very high food hygiene and safety requirements in this market, quick warning system, logistics work, strict labeling controls and regulations. Therefore, businesses must be very careful in production and processing processes and apply high technology in product preservation.

By Ngoc Linh/Bui Diep

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