Coffee and tea are among the main agricultural exports of Vietnam. Although these products have been successfully introduced in some Asian markets, it is necessary to build a strategy to increase the export value of tea and coffee to create breakthroughs.
Vietnamese tea products have been exported to more than 70 countries and territories. (Photo: Internet)
According to the Trade Promotion Department (Ministry of Industry and Trade), Vietnam’s coffee export places second in the world, just behind Brazil. Vietnamese coffee has been present in more than 80 countries and territories, mainly in major markets such as Germany, the USA, Spain, Italy, Belgium, the UK, and emerging markets such as China, Russia, Korea, Japan, etc.
Along with coffee, Vietnam is a country having the advantage of producing tea with special flavors preferred by the world. Vietnam’s tea products have also been exported to more than 70 countries and territories. In particular, Pakistan, Taiwan (China), Russia, Indonesia, and China are the five key markets.
Notably, in recent years, Vietnam’s tea and coffee exports have changed a lot as we boost our exports of processed tea and coffee.
SPACE FOR TEA AND COFFEE IS HUGE
India, Taiwan, and Hong Kong (China) are considered to be Vietnam’s potential export markets for tea and coffee but have not been fully exploited.
Mr. Vu Van Cuong, Head of Trade Section, Vietnam Office of Cultural Economics in Taipei (China), said that Vietnam is currently the main tea supplier for Taiwan.
In 2021, Vietnam’s tea exports to Taiwan reached 18,586 tonnes, equivalent to 28.72 million USD, accounting for 14.7% of the total volume and 13.4% of Vietnam’s total tea export turnover.
Regarding coffee, according to the Taiwan Foreign Trade Management Authority, Vietnam is now Taiwan’s 8th largest coffee supplier in terms of turnover (equivalent to 2.53% market share) and 18th in terms of quantity (equivalent to 1.06% market share).
As for the Hong Kong market, according to Ms. Vu Thi Thuy, Head of the Vietnam Trade Office in Hong Kong (concurrently Macao), for many years, Vietnam has always been in the top 10 largest trading partners. In 2021, Vietnam was Hong Kong’s 7th largest trading partner, with a bilateral trade turnover of 13.62 billion USD.
Hong Kong is a market specializing in importing food within a relatively short distance and there are many similar factors in taste to Vietnam. Therefore, the ability to consume high-quality products is very good, even specialty products and high prices are also notable advantageous factors in this market.
In addition to the two above markets, India is also considered a huge market for Vietnamese tea and coffee. Mr. Bui Trung Thien, Counsellor of the Vietnam Trade Office in India (concurrently Nepal, Bhutan), said that with a population of over 1.4 billion people, India is a very large consumer market. Vietnam can export agricultural products to India, including tea and coffee.
India is one of the largest tea producers and consumers but also the largest tea import market in the world. India’s tea import, in addition to consumption in the domestic market, is also intended for re-export. India currently imports tea mainly from Nepal, Kenya, Vietnam, Sri Lanka, Iran, and Indonesia. In 2020, India imported about 67 million USD of tea, of which 4 million USD was from Vietnam, accounting for 6.4%.
For coffee, India is the sixth-largest coffee producer in the world. India mainly imports coffee from Vietnam, Indonesia, Uganda, and Kenya for processing and re-export. Vietnam’s instant coffee products are popular in the Indian market.
According to Mr. Do Duy Khanh, First Secretary of the Vietnam Trade Office in India, by monitoring and researching the Indian market, it can be seen that Indian consumers are very fond of Vietnamese coffee, including ready-made coffee and bottled coffee. Therefore, the potential for these coffee products is huge.
“The above characteristics of the main markets are opportunities for Vietnamese tea and coffee enterprises to promote exports to these potential markets,” commented Ms. Nguyen Thi Thu Thuy, Deputy Director of Export Support Center (Trade Promotion Department).
THE “WALLS” TO OVERCOME
Although they are attractive “pieces of cake”, Vietnam’s tea and coffee exports to these markets still face many challenges.
Vietnam is the main tea supplier for Taiwan, with a relatively large quantity but the value is quite low. Now, Vietnam’s main competitors in Taiwan are Sri Lanka (accounting for 15.43% of the market share), India (10.28%), Indonesia (6.46%), and China (4.79%). Besides, the Taiwan market also has quite strict regulations regarding importing products.
According to Taiwan’s regulations, tea products imported into this market must comply with “regulations on food and import-related products inspection”. The importer must register for inspection with the Taiwan Food and Drug Administration (FDA), which prohibits certain products from importing items originating in mainland China.
Besides, Taiwan’s import tariff is quite high. Import tariffs for tea originating in Vietnam are raging from 17% to 22%, or 25% depending on the type. In particular, allowed pesticide residues and Fipronil residues in the product are 0.002ppm instead of 0.005ppm (2014).
Mr. Cuong said that tea exported to Taiwan is packaged in a very large weight, over 3 kg. Meanwhile, tea from many other countries such as Japan and Sri Lanka imported into Taiwan is mainly packaged in small bags or canned suitable for making tea daily or as gifts.
Therefore, to improve the competitiveness of Vietnamese tea in this market, Mr. Cuong recommends that enterprises need to create breakthroughs. In addition to market diversification, it is necessary to diversify tea products. Besides the current types of tea, we should consider investing in the production of other types of tea such as tea bags, tea cups, etc.
On the other hand, the quality of tea must also meet Taiwan’s standards. If the product is of good quality, the space for Vietnamese tea in this market is very large.
According to Mr. Chou Tsung-Piao, General Director of Queyue Tea Company (Taiwan), Taiwanese consumers when buying tea are often interested in packaging, production information, production process, and consumption, especially pesticide residues. 66.4% of survey respondents would buy tea through the introduction of friends and relatives. And 75% would buy tea if there were clear producers and sellers. This shows that consumers have a need for food safety and hygiene as an inevitable trend.
Therefore, the promotion of high-quality tea, verification of its origin, and quality are important tasks that Vietnamese enterprises need to pay attention to. Tea products entering Taiwan must be tested to ensure pesticide residues.
Regarding the Indian market, Mr. Khanh said that to export coffee to this market, enterprises need to ensure India’s labeling, packaging, and food safety certification standards. Along with that, there must be appropriate marketing campaigns.
Vietnamese coffee mixed with milk and sugar is very interesting. (Photo: Internet)
Mr. Tarun Kumar Pandey, Director of the Indian Importers Chambers of Commerce and Industry (IICCI), also said that the opportunities for cooperation between Vietnamese and Indian enterprises are large. Coffee mixed with milk and sugar is very interesting. Vietnamese enterprises can pack small bags in line with the market by their own brand to export to India.
As for tea products, Mr. Khanh noted that the taste of Indian consumers is different from that of Vietnam, they like sweet and spicy. Therefore, Vietnamese enterprises need to research and meet this demand of the Indian people.