09:32 | 13/08/2015 Trade
(VEN) - Free trade agreements (FTAs) have continued to be the driving force for Vietnamese tea brand names to position themselves in the world market.
A common Vietnamese tea branding image is necessary
According to the Vietnam Tea Association (Vitas), Vietnam ranks fifth in the world in tea export volume after Kenya, China, Sri Lanka and India, with an annual average export value of approximately US$230 million. However, about 90-95 percent of Vietnam’s tea exports are unprocessed or primary products, which will be later marketed under foreign brand names.
One of the causes for this situation is that many foreign markets still apply high tariffs on imported tea, especially commercial tea products of less than 3kg. Another cause is that Vietnamese tea companies have failed to establish their own brand names, making their products more difficult to compete with other foreign alternatives.
According to the signed free trade agreements, the tax rates for imports into some countries will gradually fall to zero percent, including commercial tea products of less than 3kg. That will facilitate the consumption of Vietnamese small-packaged tea products via supermarkets and restaurants, said Head of Vitas Office Hoang Vinh Long.
Vietnam currently exports tea products to about 120 countries including major markets such as Chinese Taipei, Pakistan, Afghanistan, China, Russia and the US. However, every market has some specific strict requirements on tea quality as well as chemical concentrations and allowable pesticide residues in tea exports. For example, in April 2015, Chinese Taipei refused three export tea containers from Vietnam due to excessive Acetamiprid and Imidacloprid levels. In addition, Fipronil, Carbendazim, Cypermethrin, and Buprofezin have also been prohibited by tea importing countries, especially the EU and Chinese Taipei. However, these plant protection products continue to be used in Vietnam.
According to the Ministry of Agriculture and Rural Development, Vietnam currently has 140,000ha of tea, with about 130,000ha harvestable and the average fresh tea buds yielding eight tonnes per ha. The country’s annual fresh tea yield is between 180,000- 190,000 tonnes.
Vietnamese tea varies in species and is cultivated in different regions. Previously, Vietnam had only two types of tea including orthodox (OTD) processed black and green tea products, but now, it has a variety of tea products including OTD and crushing, tearing, curling (CTC) processed black and green tea, oolong tea and herbal tea. “Vietnamese tea products have great advantage in the world market under different brand names. However, Vietnamese tea companies should focus on developing a common Vietnamese tea brand along with ensured quality and reasonable price,” said Vitas President Nguyen Huu Tai.
The links between tea farmers, companies and local authorities should be further improved. Local tea growing areas in the country should be re-planned, while tea processing facilities should be inspected to ensure tea quality standards.
In late 2014, the Ministry of Agriculture and Rural Development set up a Sustainable Tea Development Steering Committee to implement a tea variety development project until 2020, with the intention of effectively improving Vietnamese tea quality.