Unlocking the potential of Vietnamese medicinal herbs

October 05, 2023 | 11:29
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Data from the Ministry of Industry and Trade (MoIT) shows that exports of cinnamon and star anise have increased steadily over the past few years, reaching a value of $276 million last year. However, this figure remains modest when compared to the overall global market, as the cost of production, storage, and transportation remain major obstacles for local businesses when exporting medicinal herbs.
Unlocking the potential of Vietnamese medicinal herbs

Speaking at a conference on September 29, Nguyen Dinh Chien, deputy director of Yen Bai Department of Industry and Trade said, "Yen Bai is home to the country's largest cinnamon area, with 86,000 hectares and an output of 30,000 tonnes per year. However, the province only exports $50-60 million of cinnamon annually."

He asked Vietnamese Trade Offices abroad to introduce Yen Bai's cinnamon to importers around the world and entice investors to develop the local cinnamon processing industry.

Bui Trung Thuong, trade counsellor at the Vietnam Trade Office in India said, "Vietnamese cinnamon is popular in India due to its high essential oil content and unique flavour. With a population of about 1.3 billion people, India is the world's leading consumer of cinnamon and star anise."

"Thanks to preferential tariffs under the ASEAN-India Trade in Services Agreement, Vietnam is the largest supplier of cinnamon products to the Indian market. In the most recent fiscal year, Vietnam exported 32,650 tonnes, accounting for 85 per cent of India's cinnamon imports," Thuong added.

Do Ngoc Hung, commercial and trade counsellor at the Vietnam Trade Office in the United States added, "Cinnamon and star anise are both popular in the US market. They are widely used in the pharmaceutical and cosmetics industries, and are sometimes added to drinks like tea and coffee."

"There is great potential for Vietnam to export cinnamon and star anise to the US market thanks to its high quality," Hung continued.

In 2022, the export turnover of cinnamon from Vietnam to the US stood at about $50 million, accounting for 35 per cent of the US's total imports.

"Cinnamon exports need Food and Drug Administration certification to enter the US, so it is crucial that production processes and product quality are constantly improved. Vietnamese cinnamon and star anise then need to be promoted at trade fairs to help increase their penetration into the US market," said Hung.

Pakistan is another potential market for Vietnamese cinnamon. According to Nguyen Thi Diep Ha, head of the Vietnam Trade Office in Pakistan, the country has a lot of demand for cinnamon and other medicinal herbs. Pakistan imported 7,000 tonnes of cinnamon last year, of which Vietnamese exports accounted for more than 4 per cent.

She said, "Pakistan imports cinnamon mainly as a spice, so it prefers thin-skinned variants with low essential oil content. The nation requires plant quarantine and Halal certificates for imported cinnamon. Processed products must also possess a food hygiene and safety certificate."

"Along with cinnamon, Vietnamese star anise and cardamom account for 1 per cent and 5.8 per cent of the market share in Pakistan respectively," she added.

"Again, these are mainly imported as spices, so it prefers low-cost, low-essential oil varieties and requires similar certifications to cinnamon products. Therefore, localities need to develop growing areas to maintain a stable supply."

Nguyen The Thinh, director of the Department of Traditional Medicine and Pharmacy Administration said, "Vietnam is home to a diverse range of medicinal herbs, with many precious and rare types. However, it has a low export turnover due to the lack of a master plan. With its spontaneous development, Vietnam has failed to identify the viable markets for medicinal plants."

He added, "The export options for cinnamon, star anise, and other medicinal plants have been increasingly expanded due to changes in consumer awareness. In addition, there has been strong development of the global pharmaceutical, functional food, food processing, and cosmetics industries, which creates additional demand for such products."

Unlocking the potential of Vietnamese medicinal herbs

On the global map of herbs, Vietnam is assessed as possessing a diverse and abundant supply of medicinal species, and it boasts great potential for developing this field into an economic success story.

Cinnamon cultivation in Vietnam covers about 150,000ha, accounting for 17 per cent of the global area. The nation is the third-largest producer and exporter of cinnamon in the world in terms of output, after Indonesia and China. Meanwhile, very few countries can supply star anise – the plant is widely grown in Vietnam and China.

The MoIT is working closely with the Ministry of Health to create links between Vietnamese medicinal farming and processing businesses. It has asked Vietnamese Trade Offices to monitor, support, and provide information on the market needs, regulations, and requirements for cinnamon, star anise, and medicinal plants, helping to promote products and develop the export potential around the world.

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Vietnamese businesses which want to export medicinal herbs to China must submit information about growing areas and packaging establishments to the provincial Departments of Agriculture and Rural Development.

By Hai Van

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