Vietnam’s cinnamon industry is focusing on building a robust ecosystem to capitalise on opportunities created by free trade agreements (FTAs), including the UK-Vietnam Free Trade Agreement (UKVFTA), to enhance its global exports sustainably.
With 16 FTAs in place, such as the EU-Vietnam FTA (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP), Vietnam has established a competitive edge in tariffs, opening new avenues for cinnamon exports.
Vietnam is the world’s largest producer of cinnamon, with 180,000 hectares under cultivation. It has also maintained its position as the leading exporter since 2021. In 2023, Vietnam exported nearly 90,000 tonnes of cinnamon, valued at $260 million, capturing 34.4% of the global cinnamon market. The spice is in growing demand worldwide due to its applications in food, pharmaceuticals, cosmetics, and health supplements.
Vietnam’s major export markets include India, China, Bangladesh, the US, and the EU, with the latter two showing significant growth in recent months.
The UKVFTA has emerged as a key driver of growth for Vietnam’s cinnamon exports to the UK. The trade pact eliminated 85.6% of tariff lines for Vietnamese products in 2021, with 99.2% expected to be tariff-free by 2027. As a result, cinnamon exports to the UK surged by 94.4% in the first two months of 2024, contrasting with declining exports to other major markets such as India (-30.3%) and the US (-0.8%).
Since the UKVFTA’s implementation in January 2021, Vietnam’s cinnamon exports to the UK have steadily increased. The UK imported $2.97 million worth of cinnamon in 2021, rising to $3.36 million in 2022 and $2.38 million in 2023, according to UN COMPTRADE data.
Despite its global presence, only 18.6% of Vietnam’s cinnamon exports are processed products, with the majority sent to the US (70%) and the EU (12%). Meeting stringent EU and UK standards for green consumption, carbon emissions, traceability, sustainable production, and maximum residue levels (MRLs) remains a challenge.
To address these issues, the Vietnam Pepper and Spice Association (VPSA) President, Hoàng Thị Liên, emphasised the importance of scientific research, sustainable farming practices, and strengthening links between farmers, cooperatives, processors, and exporters. These measures are critical for meeting market demands and sustaining growth.
The Government and industry stakeholders are working towards creating a comprehensive value chain for cinnamon. This includes financial support for farmers, promoting trade, developing a brand identity for Vietnamese spices, and encouraging the adoption of digital technologies for origin traceability and production management.
The Ministry of Industry and Trade’s Multilateral Trade Policy Department highlighted the importance of collaboration between management agencies, localities, enterprises, associations, and farmers to establish a cinnamon ecosystem. This initiative aims to optimise the benefits of FTAs, ensuring Vietnam’s cinnamon industry continues to thrive in global markets.
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