The Vietnam Tea Association (Vitas) has recently warned that our tea industry can lose its EU market after the customers in the UK and other European countries receive an announcement of plant-protecting chemical residues in tea products imported from Vietnam exceeds the EU’s allowed number for many times.
 
Moreover, there is a fact that for many years Vietnam’s tea industry have had to accept the exporting price which is lower than international ones from 0.5 to 0.7 US Dollar per kilogram (only equivalent to 65%- 70% of the exporting price of many countries). In the first months of this year, the average exporting tea price only reaches 1,006 US Dollar per ton approximately, decreasing 4.6% compared to the 2006’s average price (1,062 US Dollar per ton).

Vitas says that the decrease in exporting tea price and the danger of losing market partly root from the too fast and spontaneous development of tea processing net which is not suitable with material areas. According to Mr. Nguyen Kim Phong, the Chairman of Vitas, there are more than 600 tea processing factories with the capacity over 3,100 tons of fresh tender tea leaves per day (more than 600 thousand tons of fresh tea tender tea leaves per year). With the 2005’s production of 546,000 tons of fresh tender tea leaves, only 88% of the demand of industrial processing factories on fresh tender tea materials was met. In addition, there are hundreds of manual processing tea factories and semi-industrial ones join buying materials to primarily produce.

Because of the lack of materials, many factories do not pay much attention to examine the quality of inputs, especially the plant-protecting chemical residues. Buying price is not reasonable so tea producers are not encouraged to take care of the quality of materials. As a result, the average capacity of the whole country only reaches 5.7 tons per hectare; while with reasonable good care, the capacity of many tea groves would reach 20 to 25 tons per hectare. Moreover, technical equipments for processing is backward so the majority of Vietnam tea is exported in form of materials and finished tea products only account for 7% in the total exporting turn-over.

Vitas says that tea industry does not meet the two most important requirements. One is the equality of product quality and the other is global safety food standards. Furthermore, the slow in innovation process of tea varieties is also affecting the tea quality of our country. 74% of cultivated area is planted with local tea varieties and 26% remaining area is planted with new ones (in which high quality varieties only make up 7%).

In coming time, developing the brands of Vietnam safe tea based on fresh material areas and meets European and Japanese strict standards, is the goal of Vietnam’s tea companies. The Ministry of Agriculture and Rural Development has set up a plan to modernize tea industry with the total amount of 420 billion Vietnamese dongs. This plan mainly focuses on improving tea varieties and building tea processing models with high quality.

Moreover, according to Vitas, building industrial processing factories must be stuck to tea areas in order to solve the current problems of the redundancy of factories and the lack of materials. In addition, it is necessary to encourage foreign enterprises to invest in high-productivity tea areas and to transfer production technology which is under standards of fastidious markets such as Europe, America, Japan, and so on. They are considered as some effective ways to increase exporting tea price and protect tea industry from the risk of losing its markets.