Vietnam tea exports continue to look bleak for 2017

Global sales from tea exports continued a downward trajectory for the fifth consecutive year in 2016, dropping an average of 9.5% annually from US$7.2 billion to US$6.5 billion, according to recently released statistics from the world fact book.

Among continents, Asian countries accounted for the highest dollar value of exported tea sales during 2016 with shipments valued at US$4.3 billion or roughly two-thirds of the global total.

African countries followed with market share of 15.1%, trailed by the EU at 14.9%, North America at 2.5%, Latin America excluding Mexico and the Caribbean at 1.7%, and Oceania nations including Australia at 0.2%.

The top five exporting countries were China at US$1.5 billion (22.8% of total global tea exports); Sri Lanka at US$1.3 billion (19.2%); Kenya at US$680.6 million (10.4%); India at US$661.7 million (10.1%); and the United Arab Emirates at US$287.9 million (4.4%).

Vietnam ranked as the 12th largest tea exporting country with total export sales of US$104.1 million (1.6% of total global tea exports) just slightly behind Japan in 11th with US$108.9 million of total export sales.

Among the top 15 tea exporting countries, the fastest-growing tea exporters since 2012 were: Japan (up 69.1%), United Arab Emirates (up 61.9%), the United States (up 46.9%) and China (up 42.5%).

Those countries in the top 15 that posted the largest declines in their exported tea sales were led by: Vietnam (down 53.7%), Kenya (down 43.5%), United Kingdom (down 30%), Indonesia (down 27.8%) and Sri Lanka (down 10.8%).

The Vietnam Tea Association has forecast that tea export sales for 2017 will regain some of the 53.7% of lost sales over the past five years and increase 10% year-on-year from the figures for 2016.

Unfortunately, said Nguyen Huu Tai, president of the Association, though sales have been up in the first five months of 2017 consistent with the forecast, the average sales price of tea is down 3.8% against last year’s same period to just US$1,452 per ton.

This means that the earnings just aren’t there for tea farmers and processors and the export picture for the year remains bleak.

Roughly three quarters of tea exports out of Vietnam consist of black tea, which are lower grade teas that most often end up in blends or tea bags.

The solution, said Mr Tai, is for the Vietnamese tea segment to process higher quality teas that will command both higher sales prices per ton and bottom line earnings.

Mr Tai, suggests the segment turn to Shan Tuyet and lotus tea products.

Recently, he noted the tea industry in the provinces of Ha Giang and Yen Bai have begun exporting products produced from these types of tea on a pilot basis. If all goes well they could become the standard bearer for the segment in future years.