Vietnam's Cinnamon Industry Eyes Growth in UK Exports
Expanding Global Reach Through Trade Agreements
Vietnam’s cinnamon industry is working to build a comprehensive ecosystem to capitalize on the benefits of free trade agreements (FTAs). The UK-Vietnam Free Trade Agreement (UKVFTA). With 16 FTAs, including new-generation pacts like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). And the EU-Vietnam FTA (EVFTA), Vietnam holds a competitive edge in the global spice market.According to the Vietnam Pepper and Spice Association (VPSA), Vietnam is the world’s largest cinnamon producer, boasting a plantation area of 180,000 hectares. In 2021, it became the leading exporter of cinnamon products, shipping nearly 90,000 tonnes valued at $260 million in 2023, capturing 34.4% of the global market.
Cinnamon is demanded globally. It’s not just for food but also for pharmaceuticals, cosmetics, and health supplements.
UKVFTA Opens New Avenues for Cinnamon Exports
While overall cinnamon exports faced challenges earlier this year, shipments to the UK and EU markets experienced significant growth. Exports to the UK rose by an impressive 94.4% in January-February, while exports to the EU increased by 12.7%. In contrast, major markets like India and the US reported declines of 30.3% and 0.8%, respectively.The UKVFTA has played a key role in this success. The agreement eliminated 85.6% of tariff lines on Vietnamese goods in 2021, with 99.2% to be tariff-free by 2027, offering a significant advantage for products like cinnamon. As a result, the UK’s imports of Vietnamese cinnamon increased from $1.65 million in 2020 to $3.36 million in 2022, demonstrating the agreement's impact.
Building a Sustainable Value Chain
Despite its success, the Vietnamese cinnamon industry faces challenges in meeting the stringent standards of import markets like the UK and EU. These requirements include sustainability, carbon emissions, origin traceability, and compliance with maximum residue levels (MRLs).Hoàng Thị Liên, VPSA’s President, emphasized the need for a shift towards environmentally friendly and sustainable farming practices. She called for stronger collaboration between farmers, cooperatives, processors, and exporters to meet these demands and ensure long-term growth.
Processed cinnamon products currently account for just 18.6% of total exports, with the majority going to the US (70%) and the EU (12%). Increasing the share of high-value and organic products could further strengthen Vietnam’s position in the global market.
Conclusion: A Promising Future for Vietnam’s Cinnamon Industry
Vietnam’s cinnamon sector is at a pivotal point. By leveraging trade agreements to expand its global footprint while navigating the challenges of stringent market standards. By focusing on sustainability, value-added products, and stronger collaboration across the value chain. The industry can continue to grow its exports to markets like the UK.Click here to reach our trading platfrom CMBroker
