Hanoi (VNS/VNA) – TheGovernment should build corporations with financial resources to helpthe domestic tea industry add value, branding and sales, said Chairman ofVietnam Tea Association Nguyen Huu Tai.

Tea is oneof the agricultural commodities greatly affected by the COVID-19 pandemic. Inthe first five months of this year, tea exports reached about 46,000 tonnes,worth about 72 million USD, down more than 10 percent in value compared to thesame period in 2019.

Tai saidtraditional markets of Vietnam such as Taiwan (China), Pakistan and Russia wereclosed. In other markets, businesses could not sign new contracts, whilepreviously signed contracts now would require deep discounts, delays todelivery times or had been cancelled.

“The globalCOVID-19 pandemic has put many domestic tea producers in a tough situation asthey have to choose between restructuring or leaving the industry,” Tai said.

According tothe prediction of the East Africa Tea Trade Association, world tea prices willfall in the near future, while restrictions on shipping of goods will reducedemand for tea in many countries. This will cause difficulties for the exportof Vietnamese tea.

Long Dinh Joint Stock Company in the Central Highland province of Lam Donghas 50 hectares of high-quality tea certified for export. Each year, more than90 percent of the company's products are exported to Taiwan as raw materials atlow prices.

But Tran PhuongUyen, the company’s Deputy Director, told nhipcaudautu.vn thatthe company’s export volume of raw tea decreased by 30 percent in Marchcompared to previous months.

“To make achange, we are stepping up the restructuring of markets, targeting more premiumproducts through the production of organic tea (True Organic) for domesticconsumption,” Uyen said.

She said thecompany had so far sold three tonnes of finished organic tea. It currentlysuffers losses but still maintains its product prices so that consumersgradually get used to organic products.

About 90 percentof domestic tea consumption comes from small establishments with unstablequality. Vietnamese tea businesses have created brands, such as Cozy, PhucLong, Cau Tre, Cau Dat and Vinatea. Although there have been many moreattractive product lines, Vietnamese tea businesses are still struggling tofind ways to bring products to consumers.

Chairman Taisaid the Government’s policies have only focused on tea production developmentrather than consumption, so many producers have sold raw tea to businesses, and are not interested in selling directly to customers.

“Meanwhile,it is not easy for Vietnamese businesses because the cost to open a teadistribution network is three times higher than that of a production factory,”Tai said.

Teaproduction in Vietnam has returned to normal, so output will not be affected bythe pandemic. The major tea exporting countries such as India, Kenya and SriLanka are still in the stage of disease control, so their harvesting andcultivation activities are restricted, affecting tea production.

Insidershave said that the coronavirus pandemic is an opportunity for many teacompanies to change and improve product value instead of chasing output. MostVietnamese tea has been exported as raw materials, which are then processed andpackaged for consumption in the local market or exported to a third country.Vietnamese tea only accounts for about 5-20 percent of the finished productvalue, while brands usually account for 40-60 percent. This is why Vietnam isamong the countries with the lowest tea export prices in the world.

Domesticenterprises need to focus on investment in improving quality, raising exportprices, and especially increasing price for tea growers to help them improveliving standards./.