Where does Vietnamese tea stand in major markets around the world?
The Ministry of Industry and Trade reported that in 2023, Vietnam's exported tea reached 121 thousand tons, valued at 211 million USD, decreasing by 16.9% in volume and 10.9% in value compared to 2022. The average export price of tea in 2023 reached 1,737.3 USD/ton, up by 7.3% compared to 2022.
1 . Tea exports are mainly in raw form.
The main factors contributing to the significant decrease in Vietnam's tea exports in 2023 are weak market demand and increasingly strict regulations in Vietnam's tea importing markets. Additionally, Vietnam's exported tea is mainly in raw form with low processing levels.
Most exported tea items experienced a downward trend in the first 11 months of 2023, with green tea leading in both volume and value, reaching 52.6 thousand tons and 104 million USD, respectively, down by 6.9% in volume and 1% in value compared to the same period in 2022. This was followed by black tea at 42.2 thousand tons, valued at 57.2 million USD, a decrease of 16.1% in volume and 18.4% in value. Flower-scented tea reached 3.5 thousand tons, valued at 7.3 million USD, down by 4.7% in volume but up by 6.7% in value.
Notably, oolong tea exports reached 1.1 thousand tons, valued at 3.5 million USD, increasing by 101.8% in volume and 106.5% in value compared to the same period in 2022.
Regarding market assessment, the Ministry of Industry and Trade stated that the share of Vietnam's tea imports in major global markets is relatively low. Therefore, despite weak market demand, Vietnam's tea industry still has opportunities to expand its market share.
According to the Ministry of Industry and Trade, to boost exports to major global markets, Vietnam's tea industry must enhance tea production in a safe direction, encourage tea producers to apply high technology, bio-technology, and organic agriculture, support tea growers in linking production with processing and product consumption, assist businesses in promoting and trade promotion, seeking tea product consumption markets, diversifying products, focusing on increasing the proportion of high-value products, and new products.
2 . Potential in large markets
For the EU market, due to climatic conditions, the EU does not produce tea and entirely depends on importing this product from other countries, making the EU the largest tea importing market globally.
Figures from the European Statistics Office show that in just the first 9 months of 2023, the EU imported tea worth 826 million USD, down by 8.6% compared to the same period in 2022. Vietnam's tea imports accounted for only 0.22% of the total import value of the EU.
The potential for tea exports to the EU market is considered very promising, especially since the Vietnam-EU Free Trade Agreement (EVFTA) came into effect. Accordingly, tea is one of the items enjoying preferential tax rates immediately after the EVFTA takes effect, providing a significant competitive advantage for Vietnam's tea industry.
However, the Ministry of Industry and Trade analyzed that tea exports to the EU still have not met expectations due to non-tariff measures such as dynamic phytosanitary measures (SPS) or technical barriers to trade (TBT) still posing challenges for agricultural products, including tea.
Therefore, to effectively utilize the tariff advantage from the EVFTA and overcome technical barriers of this market, the tea industry needs to continue to change production methods, cultivation, and harvesting according to good agricultural practices, aiming for green, sustainable production criteria to meet strict inspection requirements.
For the Pakistan market, according to statistics from the Pakistan Tea Association, in the first 11 months of 2023, Pakistan imported tea worth 507 million USD, down by 7.2% compared to the same period in 2022. Pakistan's economy is facing many difficulties, leading to a decrease in domestic consumption demand.
In the market structure, Vietnam's tea imports into Pakistan only accounted for 1.23% of the total import value, still very low compared to the market demand, so there are still opportunities to increase market share.
Furthermore, according to the Ministry of Industry and Trade, tea importing markets such as the United States, the United Kingdom, and Hong Kong (China) are also very potential for Vietnamese tea exporters to expand their market share.
For the US market, tea producers and exporters need to invest more in developing the value chain of the tea industry, especially paying close attention to food safety and hygiene issues. Besides, Vietnamese exporters need to understand and update US regulations, especially those affecting market access such as regulations on trade protection, phytosanitary, technical standards, origin, or labor standards...
For the UK market, which has strict standards for imported goods, especially agricultural products, tea products are always concerned about green, sustainable development standards. In particular, imported agricultural products are only allowed to pass customs if they have chemical residues below the maximum allowed threshold.
Therefore, to ensure product quality, it is necessary to raise awareness among producers about limiting the use of fertilizers and chemicals, agricultural practices must demonstrate responsibility to society and consumers.
To export tea to the Hong Kong market (China), the Ministry of Industry and Trade advises businesses to be aware that food safety requirements in this market are very high, with rapid warning systems, strict post-inspection, and labeling regulations. Therefore, businesses must be very careful in the production, processing, and application of high technology in product preservation process.
