After an impressive start, tea exports are still fraught with anxiety

Tea exports at the beginning of 2021 recorded strong growth over the same period last year. However, the difficulties from Covid-19, as well as a series of inherent weaknesses, including buying, selling, not controlling food quality, safety is a big problem for the Vietnamese tea industry if this industry wants to reach out further.

Vietnam currently ranks 5th in the world in tea exports and 7th in global tea production. Photo: N. Thanh

Export value increased by 30.5%

In the first month of 2021, according to the Ministry of Agriculture and Rural Development, tea exports were estimated at 10,000 tons with a value of US$16 million, up 25.8% in volume and 30.5% in value over the same period in 2020.

In the world market, the Coonoor Tea Trade Association of India (CTTA) auctions kicked off in 2021 with an average price of Rs 134.73 / kg (Rs stands for Indo-PV), up Rs 20.36 / kg from the end of 2020 before closing for Christmas and New Year.

Tea prices increased due to demand from foreign buyers when North Indian tea varieties were not available on the market because harvesting stopped in the winter.

In the domestic market, raw tea in the first month of 2021 did not have many changes. In Thai Nguyen, the price of quality tea leaves remained at VND190,000 / kg, dried green tea leaves VND90,000 / kg, and dried green tea leaves (pre-processed type 1) VND120,000 / kg. In Bao Loc (Lam Dong), the price of tea stems was stable at VND9,800 / kg, tea seed VND7,600 / kg.

Returning to the situation of tea export in 2020, it is easy to see that the tea industry is facing many difficulties when the export contracts of enterprises have been signed, but due to the Covid-19 pandemic, many contracts are postponed, even some contracts also require discounts. Meanwhile, new contracts are almost absent.

Notably, the transport cost issue also makes it difficult for many agricultural products, including the tea industry.

"Every year, transportation costs are only about US$700 - 900 / container, in 2020 it will reach US$2,700-3,000 / container, three times higher, creating great pressure on costs while tea prices decrease," said Hoang Vinh Long, Deputy Secretary General and Chief of Office of the Vietnam Tea Association.

Therefore, although tea exports in 2021 had a relatively smooth start with strong growth in both volume and value, many enterprises and experts said that transport costs, as well as the impact of Covid-19, continue to be significant concerns.

Remove the "bottleneck" of food safety

Specifically, tea production in Vietnam is still small farm production, tea materials for processing are mainly from low quality tea varieties. This makes the quality of our tea products uneven and difficult to put science and technology into production to create high quality products.

In addition, the linking of production and processing has not met the requirements. There is still a situation of buying, selling, even disrupting the export market, not controlling food quality and safety.

In addition, the brand promotion of the tea industry is also not evaluated well by agricultural experts. Food safety and hygiene is a major barrier for Vietnamese tea to access potential high-end export markets.

From the perspective of state management agencies, Mr. Nguyen Quy Duong, Deputy Director of the Plant Protection Department (MARD), said that in the past five years, under the role of state management of plant protection, food safety, agricultural materials, the Plant Protection Department has joined the public-private partnership group (PPP) of the tea industry. Together with the Vietnam Tea Association and 12 companies, the Plant Protection Department has established teams specialized in plant protection.

“In the past, there was a phenomenon of people using some plant protection drugs that were not used on tea plants. With the establishment of teams that will help train people to use pesticides in accordance with principles such as how to control drug residues, how to identify the list of pesticides used on tea tree. The ultimate goal is to ensure the quality of tea products, ensure food safety and hygiene to serve exports," said Mr. Nguyen Quy Duong.

According to the Vietnam Tea Association, the overall goal of the tea industry's orientation and the PPP program of activities in the 2021 - 2025 period will be to strictly manage the use of sustainable pesticides in the industry; improving the supply chain efficiency and quality of Vietnamese tea products through enhancing the performance of the PPP group.

Some agricultural experts believe that in order for the tea industry to have a sustainable direction, it is necessary to apply and deploy solutions to renovate production and processing, increase export value, and limit inequalities. Limiting shortcomings and building a Vietnamese tea brand.