Vietnam ranks third in the world in cinnamon production with 41,000 tonnes per year. The export price of Vietnamese cinnamon is the highest compared to other rival countries. However, the growing area of cinnamon has increased too rapidly over the years, causing many cinnamon farmers and exporters to fear that there may be risks in the future if the supply exceeds the demand.
Cinnamon exports bring high values. (Photo: Internet)
At the “Orientation for sustainable cinnamon development” workshop organized by the Center for Rural Economic Development (CRED), the Swiss Association for International Cooperation in Vietnam (Helvetas), and the Department of Agriculture and Rural Development of Yen Bai Province on May 11 in Yen Bai, the delegates said that the strong growth in the past 10 years shows that the cinnamon industry is developing “too hot”.
CINNAMON PRODUCTION RANKED THIRD IN THE WORLD WITH THE HIGHEST EXPORT PRICE
Regarding the cinnamon market, Mr. Vien Kim Cuong – An expert on the Project “Promoting gender equality through improving the economic efficiency of agricultural production and tourism development” (GREAT), said that the total annual global production of cinnamon is about 242,000 tonnes, total export trade 154,000 tonnes, and domestic consumption 87,000 tonnes.
Indonesia, China, Vietnam, and Srilanka are the four largest cinnamon producers in the world. In particular, Indonesia produced 89,000 tonnes, China 82,000 tonnes, Vietnam ranked third globally in cinnamon production with 41,000 tonnes, and Srilanka reached 24,000 tonnes. In terms of consumer markets, the world’s three largest importers of cinnamon are India with nearly 32,000 tonnes annually; the United States with more than 28,000 tonnes, and Germany with more than 20,000 tonnes.
Regarding cinnamon prices, Mr. Cuong said that in 2021, Vietnamese cinnamon’s average export price was about 4 USD/kg. This was the highest price among the major cinnamon-growing countries, higher than China, Indonesia, and Srilanka. Germany is also a country that exports many cinnamon products, with an average selling price of up to $7 per kilo. However, this country mainly imports raw cinnamon for processing and re-export while Vietnam exports raw cinnamon. Therefore, the export price of German cinnamon is higher than ours.
Explaining the reason why the export price of Vietnamese cinnamon has been increasing so rapidly over the years and surpassing its rivals, Mr. Cuong said:
In the past, Vietnamese cinnamon was only exported to China and India. Since 2012, several European projects have been supporting the Vietnamese cinnamon industry, including the BioTrade project sponsored by the Swiss Federal Economic Bureau – SECO and implemented by HELVETAS Vietnam, and the CRED. As a result, many Vietnamese cinnamon products are granted organic certification and international sustainability certification.
Along with the support for cinnamon trade promotion, the European market has known Vietnamese cinnamon. From here, many Vietnamese enterprises have exported cinnamon directly to Europe instead of exporting to India and China.
Consumers and trading partner businesses in Europe quickly realized that cinnamon products from Vietnam were of superior quality to cinnamon from China and Indonesia so they paid higher prices for Vietnamese cinnamon.
SUSTAINABLE DEVELOPMENT TOWARD ORGANIC
According to Mr. Cuong, from 2000 to 2010, the price of cinnamon was low, causing many farmers in Indonesia to cut down cinnamon trees and change to other crops. This led to an imbalance between supply and demand, increasing cinnamon prices, especially from 2016 to now.
Vietnamese cinnamon industry is developing “too hot”. (Photo: Internet)
However, the constantly increasing price has caused the massive growth of cinnamon in Vietnam. The strong growth over the past 10 years shows that the cinnamon industry is developing very “hot” in our country.
“In the short term, the demand for cinnamon grows faster than the increase in global supply, which is estimated at 8-12%. It is forecast that the price of cinnamon will continue to be high in the next few years. But in the long run, if many Indonesians go back to growing cinnamon, the price will decrease, ” Mr. Cuong warned.
Mr. Nguyen Thai Binh, Deputy Director of the Department of Agriculture and Rural Development of Yen Bai, shared that in the development of the forestry economy of the province, cinnamon is identified as a key tree.
“ The management of seedling quality and the pest situation for cinnamon has been affecting the development and quality of cinnamon. Many cinnamon growers have massively exploited, even exploiting the area of young cinnamon, cutting trees, pruning branches, negatively affecting the growth and the quality of cinnamon”. Mr. Nguyen Thai Binh said.
Up to now, Yen Bai is the province with the largest growing area and production in the country, concentrated in Van Yen district with 45.2 thousand hectares (accounting for 56.3% of the province’s cinnamon area) and Tran Yen district with 19 thousand hectares (accounting for 23.6%). Currently, in the province, there are 17 cinnamon essential oil extraction factories with a total capacity of 1,000 tonnes/year.
Besides, there are more than 400 small-scale processing facilities for cinnamon essential oil, mainly operating by manual methods, with a capacity of about 200 tonnes/year.
Mr. Nguyen Thai Binh added that in the period 2021-2025, Yen Bai has issued a policy to support the development of organic cinnamon. Specifically, for projects of 1,000 hectares or more, the province supported VND 2 billion/project.
“The income from cinnamon trees is over VND 1,000 billion per year, accounting for more than 50% of the production value of Yen Bai forestry sector “, Mr. Kieu Tu Giang, Head of Yen Bai Provincial Forest Protection Department, shared.
He also added that the province has set a goal to 2025, keep the cinnamon area of 80,000 ha, in which, promote 40,000 ha towards organic and 8,000 – 10,000 ha of organic cinnamon certificated.
Along with that, the province develops a sustainable forest management plan, focusing on building an effective exploitation plan. Yen Bai province is supporting the development of sustainable cinnamon in an organic direction to meet the requirements of domestic and foreign markets. This is to bring Yen Bai cinnamon products into developed markets such as Europe, America, Japan, etc.