Oversupply and COVID-19 pandemic combine to slow tea exports

During the opening two months of the year, Pakistan, Russia, Taiwan, Indonesia, and the United States made up the five main export markets of Vietnamese tea products, accounting for 74.5% of the country’s overall tea export turnover in the process.

The average export price of tea during the reviewed period fell to US$1,481 per tonne, representing a 13.5% drop in comparison with last year’s corresponding period.

Most notably, tea exports to China plummeted as a result of fresh restrictions placed on goods passing through customs due to the impact of the COVID-19 pandemic and the long Lunar New Year holiday.

Indeed, the first two months of the year saw the country only ship 364 tonnes of tea to the Chinese market, bagging US$427,000, an annual decline of 54.1% in volume and 87.4% in value, resulting in China’s market share of the country’s total tea export turnover being only 1.7%.

According to the Vietnam Tea Association, the negative effects of the COVID-19 pandemic had rapidly spread to several of the country’s important markets by late March, leading to production and business disruptions.

A number of its major markets such as Taiwan, China, and Russia have been left almost frozen, while local businesses have seen many contracts either delayed, cancelled, or simply not available.

In the domestic market, the price of tea endured a downward trend in March, hovering between VND100,000 and VND220,000 per kilo depending on its quality.

The price of tea globally is projected to fall in the near future as a consequence of the COVID-19 epidemic which has also affected the export of Vietnamese tea, the East Africa Tea Trade Association says.