Vietnam aims to boost tea value, not volume

Monday, 29 November 2010 01:33 - - {{hitsCtrl.values.hits}}

HANOI (Reuters) - Vietnam’s tea exports next year could rise 4 percent to 130,000 tonnes but the industry is aimed at improving tea quality to raise revenues, rather than increasing volumes, an industry official said last week.

Vietnam ranks as the world’s fifth-largest tea exporter and producer with shipments generating $179 million this year, up 5.3 percent from 2009, said General Secretary Nguyen Thi Anh Hong of the Vietnam Tea Association.

“Vietnam will not try to raise output but will focus on quality, especially to meet those standards demanded on the international market,” Hong told Reuters in an interview.

“The target now is to raise export prices,” she said, adding that Vietnam will try to increase the ratio of the more expensive green tea to half of annual output over the next few years, from 40 percent now, as a way to increase revenues.

Black tea now represents the majority 55 percent of Vietnam’s tea production, while other varieties such as jasmine tea make up the remaining 5 percent.

Last month, a kilogramme (kg) of Vietnamese black tea brought in $1.36, while green tea was sold abroad at an average $1.66 per kg, data from the tea association show.

The average export price of Vietnamese tea this year would reach an average $1.45 per kg, and the industry hoped to raise to $1.6 next year, Hong said.

“Over the next three to four years Vietnam will shift its tea export to markets where a high quality is required,” Hong said, citing England, Germany and other member states of the European Union.

Next year, Vietnamese tea producers will start reorganising production in order to obtain quality certificates granted by UTZ Certified, Rain Forest Alliance, and Viet Gap, which will help raise the selling price, Hong said.

Vietnam’s tea sector employs about 6 million people living in more than half of the country’s provinces, but its tea export revenues are far behind the $1.3 billion that Sri Lanka, the world’s third-largest producer, was expected to earn this year[ID:nSGE6AN08V].

Vietnam has been exporting its CTC (crush-tear-curl) black tea to Taiwan, China and Indonesia. It also sells black or green tea to Pakistan, Russia, the United States, India, Afghanistan and the United Arab Emirates.

Vietnam shipped an estimated 112,000 tonnes of tea in the first 10 months of 2010, unchanged from a year ago, while revenues rose 11 percent to $163 million, government data show.

The world’s biggest tea producers also include China, India, Kenya and Indonesia.

While Vietnam is the world’s second-biggest coffee producer after Brazil, many Vietnamese, including coffee exporters, still prefer tea to coffee. Annual consumption stands at about 14 percent of output, or 20,000-22,000 tonnes of mostly green tea.