This was affirmed by PhD. Nguyen Kim Phong, Chairman of the Vietnam Tea Association in a press brief entitled: “Promoting investment and trade for the tea industry in 2009” on October 9th, in Hanoi.
98 percent of tea for export is in raw materials
At present, Vietnam’s average tea price for export is around USD1,100 per tonne while the figure on the world market is USD2,200 per tonne. Specifically, Vietnamese tea raw materials after being processed by some customers were sold at USD9,800 USD per tonne in the UK.
Mr. Phong said that the situation comes from the reality that 98 percent of Vietnam’s tea for export is in raw materials.
Moreover, there are nearly 635 processing plants, but the material area only meets 40 percent of the figure, leading to competition in buying and selling raw materials. Tea planters, looking for quick profits, utilize pesticides and fertilizer to increase productivity. This has created imbalance in the quality of tea products and resulted in reduced prices.
Tea trees can reduce poverty
In Vietnam, many localities in the mountainous, Northern midland, and Highland provinces have full potential for the development of tea trees which are harvested in 34 provinces, with nearly 6 million workers. In 2008, statistic figures showed that the country’s tea plantation area was 131,000 hectares. The figure is expected to be 150,000 hectares in 2015.
“If new types of tea are developed with a productivity of 12,000 tonnes of bud a hectare (2.5 tonnes of dried tea a hectare) at USD3,000 per tonne (for export), tea can be the tree for poverty reduction,” Mr. Phong asserted.
Previously, Vietnam’s tea products were only exported to three countries, it has now emerged in 110 countries. The country earns an export turnover of USD130-140 million annually.
However, Mr. Phong noted that to succeed this target, participations of both foreign and local investors are needed because the local tea industry lacks capital to develop in the raw materials area and its machines and processing devices are outdated. Moreover, farmers are not knowledgeable in creating high-quality tea products and using pesticides to protect tea trees.
Mr. Phong proposed that the local tea industry should establish the model: “plants of farmers and farmers have own plants”. Thanks to the model, interest of both producers and processors can be coupled. This is expected to create tea products with a Vietnamese brand, replacing selling raw materials.
On October 15 and 16th, a meeting for investment and financial promotion for the local tea industry will be held in Hanoi and Phu Tho. The meeting will report the general view of the local industry and the policy to develop tea in the near future. Moreover, drafts for foreign and local investment policies and the prospect for the local tea industry will be also discussed at the meeting.
The meeting’s organizing board said that there were 10 foreign investors from Japan, the U.S. and Pakistan and 30 Vietnam’s leading tea companies registered for the event.
(CPV)
