Vietnam Tea Industry from Potential to Reality

According to the evaluation of the Food and Agriculture Organization (FAO), the Vietnamese tea ranked seventh in tea output and sixth in export value in the world for many years. With this ranking, the tea industry is holding an important role in the growth of the Vietnamese economy.

 

Since Vietnam began cultivating and processing tea using industrial methods, the tea industry has grown very quickly. If the Vietnamese tea sold in the European market was packed under brand names of French companies in the 1990s. Now, it has its own trademark and has been exported to 107 markets in all continents, including 18 traditional markets and 68 WTO member markets. Tea cultivation and processing have attracted a lot of foreign investors from Japan, Belgium, Taiwan and other countries. Joint venture companies and wholly foreign-owned ones have invested in large tea fields, built modern processing factories and produced favourite specialty tea.

 

At present, 34 provinces and cities in Vietnam are growing tea on a total area of 125,000 hectare. Each hectare brings in some VND280 million (US$17,500) in revenue a year. In addition to traditional tea varieties, many new varieties with higher quality, higher productivity and better flavours are the liking of consumers in Vietnam and other countries. On the market, green tea now accounts for some 50 per cent, black tea 49 per cent and other kinds 1 per cent.

 

The Vietnamese tea materials currently reach around 577,000 tonnes, which are supplied to more than 600 processing factories on industrial scale and thousands of small processing units. According to the General Secretary of Vietnam Tea Association Nguyen Tan Phong, the highest obstacle of the current tea industry of Vietnam is the material zone. The tea cultivation area still fails to satisfy the demand of mushrooming local processing units. Mr. Phong said the current number of processing units trebled that in 1999 with dozen thousands of small processing units in northern mountainous provinces.

 

The establishment of more processing units also meant more initiatives in tea types on the market. Currently, Vietnamese tea processing units can manufactures 15 different kinds of tea, including several world-favourites like oolong tea, black tea and jasmine tea. To develop as well as protect the trademark of the Vietnamese tea, CheViet, the Vietnam Tea Association has registered for direct protection, and according to the Madrid Agreement, the protection is valid in 73 countries and territories in the world. Presently, eight companies have registered and received permissions from the Vietnam Tea Association to stick the trademark on 17 products sold in Vietnam and in other countries.

 

The tea tree is one of few backbone trees in the socioeconomic development strategies of northern, central northern and central highland provinces. The tea tree used to be known as a hunger eliminator, poverty reducer and bare hill coverer but it is now a key tree in the national economic development. Under the plan, the tea industry will generate US$1 billion in revenue by 2020.

 

In the monsoon tropical climate, the tea grown and sold in Vietnam is very rich in extracts capable of preventing cancer, tumours, inflammation, early aging, and cardiovascular diseases. Apart from tea leaf, Vietnam also manufactures tea from roots, fruits, flowers and other leaves with high pharmaceutical values like ginseng tea, Hong Mai tea and bitter gourd tea. In addition, several tea types like bitter tea and ampelopsis cantoniensis planch capable of fighting obesity, high cholesterol and other diseases. The Vietnamese tea is also able to absorbed flavours of various kinds of flowers like lotus, jasmine and daisy. After being scented with these flowers, the tea has special flavours, unique to Vietnam.

 

Forecast of world green tea output and export until 2014 (1,000 tonnes)                                     Output                                                      Export
	Actual	Projected	Growth ( per cent)		Actual	Projected	Growth ( per cent)
	2003	2014	1993/03	2003/2014	2003	2014	1993/03	2003/2014
World	756,1	975,0	2.5	2.3	226	275	5.6	2.8
China	585,0	740,1	3.8	2.2	178.6	242	6.5	2,8
Japan	87,0	92	0.0	0.5	0.8	1.2	9.9	3.2
Vietnam	30,0	39,6	4.3	2.6	17.0	28	5.0	4.5
Indonesia	41,0	49,1	1.0	1.7	55	5,8	-6.3	0.5
Source: Tea – Current Market Situation and Medium-term outlook, FAO, 2005