Since the beginning of 2023, cinnamon essential oil products have been difficult to sell, have low prices, and cannot be exported due to inappropriate regulations. Recently, the Ministry of Health and the General Department of Customs have issued specific instructions, so the export of cinnamon essential oil has recovered.
According to calculations, it costs about 400,000 - 480,000 VND to produce 1 kg of cinnamon essential oil. However, since the beginning of 2023, the selling price of cinnamon essential oil has dropped sharply, from 600,000 VND/kg to 360,000 VND/kg, and at times even dropped to 280,000 VND/kg, causing businesses to suffer losses, temporarily stop production, and have stagnant raw materials. Cinnamon essential oil exports have encountered difficulties, hundreds of tons of cinnamon essential oil cannot be exported, and businesses have stopped purchasing, leaving thousands of tons of raw materials rotten and damaged.
Since the end of April 2024, the export of essential oil products has been more favorable, the consumption market has expanded, and the selling price has gradually increased, which is a good sign for businesses. After a period of slow production, up to now, the cinnamon essential oil factory of Trieu Duong One Member Co., Ltd. (Pho Rang town, Bao Yen district) has been operating stably again. Currently, on average, the business uses 30 - 50 tons of raw materials per day, producing about 0.7 tons of essential oil (reaching about 80% of the factory's capacity).
Mr. Vu Van Thang, Director of Trieu Duong One Member Co., Ltd. shared: We hope that the domestic and foreign markets will be stable, creating favorable conditions for enterprises to produce and consume raw materials for the people.
The favorable consumption of cinnamon essential oil is also a good sign, helping thousands of cinnamon growers in the province to reduce their worries about raw material consumption. Mr. Dang Van Minh in Ban Cai commune (Bac Ha) said: Since the end of last year, the price of cinnamon branches and leaves has dropped, at times selling for 600 VND/kg, the low selling price is not enough to cover the labor costs of exploitation, so many households do not prune branches and leaves to sell. Recently, the selling price has stabilized again (from 1.6 - 1.9 thousand VND/kg), helping cinnamon growers have more income.
Bao Thang district currently has 4 cinnamon essential oil processing factories, with an output of 140 tons of essential oil/year. Sharing the same difficulties as the province's cinnamon essential oil processing facilities, in 2023, many facilities operated at a low level, some facilities stopped operating, but have now resumed operations.
Mr. Hoang Minh Thai, Director of Hoang Thai Company Limited (Xuan Quang Commune, Bao Thang District) shared: Recently, the cinnamon essential oil consumption market has been more favorable, the selling price has increased by about 10 - 20% compared to the end of last year, however, the quantity of exported goods is still low due to the general difficulties of the world market. With a designed capacity of 70 tons of essential oil/year, the unit is currently only producing 50% of its capacity.
“Hitting rock bottom” at the end of 2023 with a selling price of only 280 - 330 million VND/ton, in the past month, the price of cinnamon essential oil has started to increase, currently at 360 - 400 million VND/ton. According to forecasts, this price will continue to improve when the problem of export code regulations is actively coordinated by functional sectors to resolve.
Mr. Vu Hong Diep, Deputy Head of the Provincial Forest Protection Department, said: Cinnamon products are currently exported in raw form, used as food and flavoring. Therefore, applying a single code for medicinal herbs has unintentionally made it difficult for businesses, leading to cinnamon growers being unable to sell their products. Recently, the General Department of Customs has issued specific instructions for businesses in declaring export purposes, which has helped cinnamon essential oil exports flourish again. With this move, people are excited to harvest cinnamon, businesses are actively purchasing and processing essential oils and cinnamon products.
The province currently has more than 58,000 hectares of cinnamon, annually bringing to the market about 9,000 tons of cinnamon bark, nearly 120,000 tons of branches and leaves. Currently, the province has 9 companies and 1 cooperative producing cinnamon essential oil. The design capacity of processing facilities ranges from 60 - 120 tons of cinnamon essential oil/year/facility. The technology for extracting essential oils has basically applied boiler technology. The province's cinnamon essential oil output reaches more than 450 tons/year. The purchase of raw materials for extracting essential oils (cinnamon branches and leaves) is through small-scale purchasing facilities in localities. 85% of the province's cinnamon essential oil output is exported by facilities to the markets of China, India, and Japan; 15% of the output serves the domestic market demand.
Cinnamon essential oil is mainly pressed from leaves and small branches when people prune the trees every year to make them bigger. Although it is a by-product of cinnamon trees, it has brought in a significant source of income to help people reinvest in production.
It is expected that the output of cinnamon essential oil in the province will increase sharply when many raw material areas in localities are ready for exploitation. Along with expanding organic cinnamon growing areas, the province is also prioritizing the deep processing of cinnamon products, including cinnamon essential oil, to enhance the value and sustainability of this key industry.
The price of cinnamon essential oil has decreased, making it difficult to export. In addition to the difficult market and falling prices, the implementation of some regulations on declaring product codes in export is also due to the reasons. The People's Committee of Lao Cai province has sent a dispatch requesting the Ministry of Health to help remove difficulties and obstacles in exporting cinnamon essential oil for businesses.
On April 15, the Ministry of Health held a meeting to review difficulties and obstacles in the export of medicinal herbs according to Official Dispatch No. 35/CD-TTg dated April 10, 2024 of the Prime Minister. At the meeting, the General Department of Customs said that it had sent an official dispatch to the Lao Cai Provincial Customs Department, stating: In case an enterprise declares cinnamon essential oil for export as medicinal herbs, it shall comply with the provisions of the Pharmacy Law; in case an enterprise declares cinnamon essential oil for export as food, food additives, cosmetics or other purposes, it shall compare the provisions of the food safety law and related fields to determine the corresponding management policy and handle procedures according to regulations.
Source
Comment (0)