Tea export, how to increase market share?

Why did tea exports reach their lowest level in the past 7 years? In January 2024, Vietnamese tea was exported to 16 markets

Tea exports in the first two months of 2024 grew by double digits

The Import-Export Department (Ministry of Industry and Trade) cited data from the General Department of Customs, saying that it is estimated that in February 2024, tea exports reached 8,000 tons, worth 14 million USD, down 35.5% in volume and 35% in value compared to January 2024, but up 17.6% in volume and 21.9% in value compared to February 2023.

Tea exports need to promote deep processing

In the first two months of 2024, tea exports are estimated at 20,000 tons, worth 35 million USD, up 50.9% in volume and 53.5% in value over the same period in 2023.

The average export price of tea in February 2024 is estimated at 7,705.5 USD/ton, up 3.6% compared to February 2023. In the first 2 months of 2024, the average export price of tea is estimated at 1,698.6 USD/ton, up 1.7% compared to the same period in 2023.

The average price of tea exported to major markets increased and decreased inconsistently. While the average price of tea exported to markets such as Pakistan, Saudi Arabia, the United States, and Taiwan increased, the average price of tea exported to markets such as China, Malaysia, Indonesia, etc. decreased sharply.

Tea is a Vietnamese commodity with the world's top 5 reserves. In 2023, Vietnam's tea exports reached 121,000 tons, worth 211 million USD, down 17% and 11% respectively compared to the same period last year. This is also the year with the lowest export output in 7 years.

The average export price of tea last year reached 1,737 USD per ton, an increase of more than 7% compared to 2022, but this price is only 67% of the average export price of tea in the world. Compared to major tea exporting countries today, Vietnamese tea prices are almost at the "bottom of the list".

The reason is that demand in major export markets such as Pakistan, Taiwan, Russia, etc. has decreased significantly. In addition, the types of tea exported by Vietnam are still mainly in raw form and have low processing content.

Meanwhile, the trend of tea consumption in the world has changed, shifting from regular tea products to deep-processed and specialty tea products. This makes it difficult for Vietnamese products due to slow investment in deep processing and few new products.

Need to focus on improving productivity and quality

Research from Research and Markets shows that the global tea market reached 24.3 billion USD in 2016, expected to reach 37.5 billion USD by 2025. The growth of the tea industry is increasing due to changing lifestyles and increasing consumer awareness of the health benefits of drinking tea.

Along with the increasing demand, tea products have also changed a lot to suit life. Accordingly, high-class tea for drinking at home, healthy tea, cold brew tea… are predicted to be the product lines leading the market in the coming period.

Experts say that with its production advantages, Vietnam has rare "green gold" reserves. However, to capture a share of the 37.5 billion USD "pie", the tea industry needs to focus on improving productivity and quality. Focused investment in deep processing, especially high-quality post-processed tea products, brings great economic value to form an advanced tea processing industry in Vietnam.

Along with that, it is necessary to develop a strategy to exploit the thousand-year-old tea forests in our country. This is a great advantage to create an image and build a brand of high-class Vietnamese tea.

A previous report by the Vietnam Tea Association indicated that the amount of tea consumed domestically is only one-third of the volume of exported tea, however the value of domestic consumption is higher (about 352 million USD), because domestic consumption is mainly packaged specialty tea. This shows that not only the international market but also the domestic demand for high-end tea is very high.

Citing the story of the “four great teas” including white tea, leaf tea, yellow tea and black tea (produced from ancient Shan Tuyet tea trees on the top of Suoi Giang mountain, Van Chan district, Yen Bai province), Mr. Le Minh Hoan - Minister of Agriculture and Rural Development - said that from an ancient tea tree growing in Suoi Giang, four different types of precious tea can be made. And the subject of this product is not only selling products (dried tea buds) but also selling a story. Economic thinking is selling the difference.

The perspective of shifting from agricultural production thinking to agricultural economic thinking; integrating multiple values in agricultural products are all here. Nowadays, people do not buy products anymore but buy the way to create those products, including the mindset, culture, story, and emotions in the process of creating the product. Therefore, whoever tells the most emotional story through the product will win. This is also a way to increase the value of Vietnamese tea trees.

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