Vietnam Tea Market Overview

Vietnam is not only famous as the home of rice but also known as one of the most ancient cradle of tea. Vietnamese people have planted tea for over three thousands years and nowadays, drinking tea has become a traditional habit of each family.

Belongs to the South East of Asia, Vietnam has many natural advantages to cultivate and process tea, such as tropical climate, soil,... Therefore, the quality of Vietnam tea products is higher than other areas, especially some traditional specialty like Shan Tuyet, Suoi Giang,... According to a historian, these teas were only discovered in the Northern mountainous region of Vietnam. Most of them are long-standing trees with 6-8 meters of height. Tea plantations in Vietnam are concentrated in the north and middle, spread over some provinces like Tuyen Quang,Yen Bai, Phu Tho, Son La, Ha Giang, Lai Chau, Lao Cai, Thai Nguyen, Nghe An. Beside being one of the solutions to eliminating hunger and reducing poverty, tea plantations also help protect the environment and bring high income to the growers. Consequently, tea has become a high value product of Vietnam.

In recent years, the area of tea cultivation and the number of manufacturers have increased rapidly. Particularly, from 5,400 hectares in 1975, the area of cultivation has reached to 80,000 hectares in 2000 with over 174 mills. The output was about 40,000 tons in 1995, now stands at approximately 80000 tons, of which export quantity rising from 17,500 tons 55,600 tons. Labour productivity in tea has risen annually by 4% during the last ten years. This year, it is estimated to be equal to nearly 7 tons of tea leaf per hectare, exceed 47% the figure of 1989.
Up to now, Vietnam tea products have made their presence in more than thirty coutries world-wide. In 2000, about 1,500 tons of processed tea were exported to Russia, allowing Vietnam to rank sixth among the fifteen Asian coutries exporting tea to that maket. The Western European market, especially Britain, annually imported 2,000 tons of tea. At present, Vietnam is known as a high quality green tea exporter with potential clients like Pakistan, Algeria, Singapore… In Asia, Taiwan and Japan are the biggest importers of Vietnam tea with an annual report amout of 10,000 and 5,000 tons respectively. Newly emerging markets like America , France and Australia also have high demands for Vietnam tea which need about 5,000-7,000 tons a year.
However, Vietnam tea industry also have to face many difficulties, of which the main problem is the capacity of processing factories. The total output of the factories haven’t met the domestic demands and exports because most of their equipment were old and backward . Furthermore, most kinds of tea that appeared since the beginning of 20thcentury were inefficient, so that affected the quality of tea products. In addition, tea exporters in the world market arebigger with every passing day while the customers always require higher quality, finer style and reasonable price. A recent statistic of export voloume shows that Vietnam just stands at the eighth among 15 countries exporting tea.
In order to solve these problems, Vietnam tea industry need to set forth some strategies for stable development in the future. In short-term, both tea growers and exporters are required to invert in equipment and processing technology , as well as improve the quality of tea. Recently, Vietnam imported several modern processing lines and some new varieties of tea from India, China, Srilanka . In long-term, the government should encourage foreign investors to co-operate with Vietnam’enterprises for building new model processing factories as well as expanding the market. Base on the world demand for tea and current real situation, the Vietnam tea industry is capable of raising the area of tea cultivation to 100,000 hectares and exporting some 130,000-150,000 tons of tea by the year 2010.
The tea industry in Vietnam has excellent potential and prospects for future growth. It is poised to take off very strongly and all this is visible in the great interest being shown by those in the top echelons of Vietnam tea industry.

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