Since 2021, Vietnam has become the world's largest cinnamon exporter. Currently, the cinnamon industry needs an innovative strategy to become a sustainable cinnamon exporting country.
Vietnam has now become the world's largest cinnamon exporter. Photo: Thanh Tien.
World No. 1 position in cinnamon export
According to the Vietnam Pepper and Spice Association, Vietnam is the world's leading cinnamon producer with an area of about 180,000 hectares. Since 2021, Vietnam has risen to become the world's leading cinnamon exporter.
In 2023, Vietnam's cinnamon export output accounted for about 34.4% of the world's export market share with major consumer markets such as India, China, Bangladesh, the United States, etc. In 2023, Vietnam exported nearly 90,000 tons of cinnamon, with a total export turnover of more than 260 million USD, an increase of 14.6% in output but a decrease of 10.7% in value compared to 2022. The average cinnamon price reached 2,918 USD/ton, a decrease of 22.1% compared to 2022.
In 2023, India was the main export market for Vietnamese cinnamon with more than 38,000 tons, accounting for 42.6%. Next were markets such as the United States with more than 10,100 tons, accounting for 11.4%; Bangladesh with nearly 6,000 tons, accounting for 6.2%...
In the first two months of 2024, Vietnam's cinnamon exports reached nearly 10,500 tons, with a total export turnover of 30 million USD. India is the main export market with nearly 3,200 tons, but compared to the same period, the export volume decreased by 30.3%. The United States, the second largest export market, decreased slightly by 0.8%, reaching 1,274 tons. Meanwhile, cinnamon exports to European countries increased by 12.7%, reaching 1,235 tons, especially exports to the UK increased by 94.4%.
Many markets around the world are very interested in Vietnamese cinnamon products. Photo: Thanh Tien.
Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association said that the potential of cinnamon material areas in our country is very large due to suitable climate and soil conditions, especially in the northern mountainous provinces such as Yen Bai, Lao Cai and some places such as Thanh Hoa, Nghe An, Quang Ninh, Quang Nam...
In recent years, farmers have continuously learned cultivation experience to improve the quality and productivity of cinnamon trees, and have adapted and accessed science and technology quickly. In addition, production linkage models are increasingly organized closely between enterprises and farmers to gradually expand sustainable raw material areas.
The Ministry of Agriculture and Rural Development and relevant agencies have issued many policies and regulations to encourage the private sector to participate in agricultural projects, in which the spice and medicinal plant industry has developed and made breakthroughs in a sustainable, organic direction, with large-scale planting areas, production and consumption linkages that meet quality requirements and traceability.
The world's demand for spices remains high, not only in the food industry but also continues to be researched and developed for application in the pharmaceutical, cosmetic, and functional food industries... Vietnam has dozens of companies investing in modern cinnamon processing lines, producing ground cinnamon and powdered cinnamon to meet market demands.
Our country's raw material areas need to improve quality to meet the increasing demands of the export market. Photo: Thanh Tien.
In addition, with 16 FTAs that Vietnam is participating in, there are many new generation free trade agreements such as EVFTA, CPTTP, CREP that have helped Vietnam gain an advantage over some other countries in terms of tax. This is a very favorable condition and opportunity for Vietnamese cinnamon products to increasingly advance further in the international market.
Deep processing to increase value
Currently, Vietnamese cinnamon has been exported to nearly 100 countries in the world, accounting for 95% of the market share in the Indian market, 36.5% in the US market and 35% in the European market. Vietnamese cinnamon products have dominated most of the major markets in the world, however, the export rate of processed cinnamon only accounts for 18.6%, reaching 18,659 tons, of which 70% is exported to the US, the export rate to Europe accounts for only 12%. Therefore, in the future, the Vietnamese cinnamon industry needs to continue to improve post-harvest and processing quality to increase exports to demanding markets in Europe, the US, etc.
The market is increasingly demanding of cinnamon products with some basic requirements such as: Green consumption, reducing carbon emissions; products ensuring traceability, sustainable production, including environmental and social factors; ensuring quality, including control and meeting MRL requirements (maximum residue limits of pesticides in food) according to market regulations; the demand for organic products, value-added products, functional foods to increase immunity, support health... is increasing.
Farmers need to change their cinnamon cultivation methods to produce sustainably and in an environmentally friendly manner. Photo: Thanh Tien.
Therefore, farmers need to change their farming methods, produce sustainably, be environmentally friendly, and use and fertilize according to the farming process. They should proactively participate in cooperatives and cooperatives to link production with export enterprises, so that they can feel secure in farming according to the process set by the enterprise, receive training support from the enterprise, and have their output products purchased by the enterprise at market prices.
On the part of state management agencies, there should be a master plan for growing areas and a master plan for raw material areas so that investors can confidently invest in the long term with a model linking farmers - exporters - end buyers. Planning raw material areas is associated with building value chains to link farmers with processing enterprises and exporters. Encouraging the application of digital technology in production management, traceability and sustainability programs.
Continue to expand the production linkage area between enterprises and farmers, including the State encouraging and promoting the establishment of cooperatives and production groups in raw material areas to act as partners of exporters in the supply chain.
In particular, the role of local authorities in raw material areas is very important in supporting the establishment and organization of people to participate in groups, teams, and cooperatives to connect with businesses to link local production. Implement training programs for farmers on sustainable farming processes, reducing carbon emissions, and being environmentally friendly...
To become the world's leading supplier of sustainable cinnamon.
According to Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association, the Vietnamese cinnamon industry in general and Yen Bai in particular need to make drastic changes to adapt to the export market requirements in the coming period. There needs to be more scientific research to promptly respond to market requirements, especially issues related to regulations on maximum residue levels, and to find appropriate solutions to treat pests. Farmers are encouraged to use alternative biological products and have measures and sanctions to effectively control illegal pesticides that are not on the state management list.
Building clean raw material areas, deep processing products and enhancing trade promotion are optimal solutions to increase output and value of exported cinnamon. Photo: Thanh Tien.
Strengthening trade promotion and building a national brand identity for Vietnamese spices is extremely necessary. This cannot be done without the coordinating role of the state management agency so that the brand building is carried out professionally, on a large scale, not fragmented and creates a spillover effect for the entire industry in the global market.
The State needs to have financial support policies, preferential loans, and timely and appropriate ones so that people can feel secure in cultivating, maintaining their gardens, and ensuring acreage to have a stable source of raw materials for processing and export. There should be policies to encourage businesses to invest in applying science and technology, support preferential loans, or subsidize part of the investment costs for high-tech production lines to increase the quality and added value of products.
Strongly promote the public-private partnership model to gather the strength and voice of stakeholders in the Vietnamese cinnamon supply chain. Share information, seek support resources and consult on policies in the strategy of building and developing a synchronous industry in the long term to help Vietnam become the world's leading sustainable cinnamon supplier.
According to Ms. Hoang Thi Lien, businesses need to continue to consolidate and develop their brands, increase deep processing, especially spices processed from farm to table, to be able to participate more deeply in the world value chain. E-commerce is one of the options for businesses and exporters to consider investing, developing product lines, increasing product presence to end consumers through the B2C form (a model in which sellers connect with buyers through e-commerce platforms) which is becoming increasingly popular.
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