In the first nine months of this year, tea exports dropped 8.8 per cent in volume and 8.1 per cent in value to 88,000 tonnes and $151 million turnover, respectively, over the same period last year. — File Photo

HA NOI (Biz Hub) — Amid a decline in tea exports, processing and export companies are shifting their focus to the domestic market with anticipated consumption demand.

According to the Department of Agriculture and Rural Development of Thai Nguyen Province, the country's premier tea growing region, during the last three years many local firms had invested for further expansion in the domestic market, besides exports.

Phan Huy Binh, chairman of Trung Nguyen Import Export Company, one of the biggest manufacturing and processing tea companies in the province with an annual export turnover of more than US$1 million, said that as it was mainly exported as a raw product or through intermediaries, export prices fluctuated between $1.7 to $2.3 per kilo, much lower than selling prices in the domestic market.

In such a situation, the company, besides maintaining its export markets, had developed many products for the domestic market with prices around VND200,000 ($9.5) per kilo and recorded positive consumption.

In recent years, Tan Cuong – Hoang Binh Tea Company joined farmers to develop stable plantation areas and with local distributors such as BigC, Hapromart and Coopmart to expand the domestic market.

The company's director Do Thi Duc Ly said that tea exports did not bring very high added value as it was mainly exported in its raw form.

According to the provincial Department of Agriculture and Rural Development, only around 20 per cent of the province's tea output was exported while the rest was for domestic consumption, estimated at around 31,500 tonnes per year.

Previously, the Ministry of Industry and Trade said Viet Nam was the fifth largest tea exporter in the world, but tea was mainly exported as a raw product with low export price, equal to about half of the world's average price.

In the first nine months of this year, tea exports dropped 8.8 per cent in volume and 8.1 per cent in value to 88,000 tonnes and $151 million turnover, respectively, over the same period last year.

Fall in tea exports was forcing the tea industry to enhance product quality and develop brand names, experts said.

As of the end of last year, the total area in the country under tea plantation was 130,000ha with Lam Dong, Thai Nguyen, and Ha Giang, in addition to Phu Tho and Yen Bai, being the largest areas. — VNS