1.

INTRODUCTION
Vietnam is a country with advantages in tea production. Vietnamese tea products have
also been exported to over 70 countries and territories. According to the data of The Import-
Export Department (Ministry of Industry and Trade, 2023), Taiwan is one of the key markets for
Vietnamese tea. Taiwan is Vietnam's second-largest export market, with the average export price
of tea reaching more than 1,643 USD/ ton in the first two months of 2023, an increase of 5.2%
over the same period in 2022. Although Vietnam is the leading tea supplier to the Taiwan market,
with a large volume but the value is relatively low. The reason is that the type of tea in Vietnam
is mainly raw. Moreover, in 2015, Taiwan revised the Law on Food Hygiene and Safety, raising
the tea standard. This dramatically reduces the amount of tea Vietnam exports to Taiwan.
Currently, Vietnamese exporters have been meeting the standards of the Taiwan import market at
a relatively low level but still have substandard products and, in general, still mainly export
products in the form of raw materials. Therefore, this essay will focus on studying the current
situation of tea export by Vietnamese enterprises and the barriers to standards posed by the
Taiwanese market. Hence, find some solutions to improve the capacity to meet the criteria to
increase the ability to export to this market.

2.5. COMPETITIONS

Regarding import competition, Vietnam is the leading tea supplier for the Taiwan market
in the first nine months of 2022, reaching 11.8 thousand tons, worth 20.4 million USD, down
14.2% in volume and it has decreased by 5.2% in value over the same period in 2021, accounting
for 52.7% of the total tea volume of the Taiwan market. The main competitor of Vietnam's tea in
the Taiwan market is Sri Lanka.Taiwan market imported tea from Sri Lanka reached 3.8
thousand tons, worth 16.8 million USD, down 1.9% in volume, but up 0.6% in value over the
same period in 2021. The average price of imported tea from the Sri Lankan market was high,
reaching $4,426.8 per ton, up 2.6% over the same period in 2021.In addition, in the first 9
months of 2022, the Taiwanese market also imported tea from India, Indonesia, Japan, China...

Although Vietnam has the highest export product production, the average price of
imported tea from Vietnam increased quite well, and it was still at the lowest level compared
with other Taiwan's main tea supply markets. While in countries like Sri Lanka and Japan,
although the export product is not as high, the average price of imported tea to Taiwan is
relatively high. The reason is that Vietnamese tea imports in Taiwan are primarily utilized in food
processing applications, including the production of milk tea and matcha powder. As a result, the
packaging format for Vietnamese tea imports typically involves larger bags with a capacity
exceeding 3kg per bag. In contrast, teas from various other nations, such as Japan and Sri Lanka,
are commonly packaged in smaller bags, canned formats, and sold through specialized tea shops,
 catering to Taiwanese consumers who purchase them for daily consumption or as gifts to
exchange with one another.

SUPPLYING BLACK TEA AND GREEN TEA TO TAIWAN MARKET

IN THE FIRST 9 MONTH 2022
Compared To The Same Period Percentage By
9 Month 2022
2021 Quantity
SPECIES Value Price
Quantity 9 months 9 months
(thousand (USD/ Quantity Value Price
(tons) 2022 2021
USD/Ton) Ton)
BLACK TEA
15733 41473 2636,0 -9,4 -5,4 4,5 100,0 100,0
VIETNAM 6656 10929 1641,9 -11,7 -8,4 3,7 42,3 43,4
SRI LANKA 3733 16419 4397,8 -1,5 0,9 2,4 23,7 21,8
INDIA 2165 4754 2195,6 -14,7 -14,4 0,4 13,8 14,6
INDONESIA 1486 3726 2507,2 -6,6 3,0 10,2 9,4 9,2
CHINA 1037 2787 2686,8 -16,4 -3,1 15,9 6,6 7,1
OTHER MARKET 655 2858 4364,9 -2,3 -20,1 -18,2 4,2 3,9
GREEN TEA 6592 22384 3395,7 -14,1 -4,3 11,4 100,0 100,0
VIETNAM 5119 9455 1847,0 -17,3 -1,2 19,5 77,7 80,6
JAPAN 1214 12086 9955,0 -0,4 -6,3 -6,0 18,4 15,9
INDONESIA 185 336 1814,8 9,4 -4,8 -13,0 2,8 2,2
SRI LANKA 68 408 6027,3 -22,7 -12,3 13,5 1,0 1,1
THAILAND 1 8 7407,4 0,0 0,0
OTHERS MARKEt 5 91 18439,7 -58,3 -18,0 96,8 0,1 0,2
Source: Taiwan General Department of Customs

In the context of domestic competition, Taiwan's tea industry has a yearly production of
approximately 16.5 million kilograms (ReportLinker, 2022). Over the past four decades, Taiwan
has experienced significant income growth, leading to a rise in demand for local teas that has
outpaced the available supply. This, coupled with Taiwan's emphasis on high-quality oolong teas,
has resulted in limited exports and high prices for Taiwanese teas. Oolong tea represents over
90% of the tea produced in Taiwan. Given considerations such as freshness, confidence in
domestic production, and support for the local economy, Taiwanese consumers predominantly
favor domestically cultivated teas. Furthermore, Taiwanese tea manufacturers have established
close relationships with regional wholesalers, retailers, and customers. Consequently, exporting
oolong tea to the Taiwanese market requires substantial effort. To maintain competitiveness in
the dynamic Taiwanese tea market, Vietnamese tea exporters must thoroughly understand their
local competitors, adapt their business strategies to align with the preferences of Taiwanese
consumers, and continuously innovate to differentiate their offerings.
 2.6. EXPORT PROCEDUES

According to the Ministry of Industry and Trade, Taiwan represents a promising export
market characterized by a diverse range of consumer preferences. As a significant product of our
nation, tea enjoys considerable export volume to Taiwan. However, it is crucial for tea exporters
to adhere to the specific regulations and requirements stipulated by the Taiwanese government.
By carefully considering the following factors, exporters can enhance their chances of success in
exporting tea to Taiwan.

From an export policy standpoint, it is important to note that tea does not fall within the category
of goods necessitating an export license. Consequently, tea exporters are exempted from the
requirement of obtaining an export license for their shipments. In terms of tax policy, tea is
classified under the Harmonized System (HS) code group 0902. This particular code group
entails that tea exports are not subjected to any export taxes or export value-added taxes (VAT).
Thus, tea exporters can benefit from a tax policy that relieves them of additional financial
burdens typically associated with exporting goods.

0902 Tea, whether or not flavoured.

090210 Green tea (not fermented) in immediate packings
0902101
Leaves
0
0902109
Other
0
090220 Other green tea (not fermented)
0902201
Leaves
0
0902209
Other
0
090230 Black tea (fermented) and partly fermented tea, in immediate packings of a content not exceeding 3 kg
0902301
Leaves
0
0902309
Other
0
090240 Other black tea (fermented) and othẻ fermented tea
0902401
Leaves
0
0902409
Others
0
Source: VietNam General Department of Customs
 Enterprises involved in the exportation of tea to Taiwan are required to develop a
comprehensive understanding of the regulatory framework governing such exports. This
necessitates a thorough comprehension of the pertinent laws, regulations, and certifications that
pertain to the export of tea products. It is imperative to conduct thorough research to gain
knowledge about the regulations imposed by the importing country regarding food hygiene and
safety, quarantine measures, and quality control standards. Additionally, the preparation of
specific documents such as phytosanitary certificates and certificates of origin (CO - Certificate
of Origin) is essential. It is worth noting that numerous Vietnamese enterprises have encountered
challenges in exporting tea to Taiwan due to their failure to meet the required residue thresholds
for pesticides. Consequently, this issue assumes paramount importance and necessitates
meticulous attention from businesses engaged in tea exportation. By ensuring compliance with
these academic guidelines, enterprises can effectively navigate the regulatory landscape and
enhance their prospects for successful tea exports to Taiwan.

Subsequently, meticulous attention should be devoted to meticulously preparing the

requisite export documentation with precision and accuracy. This encompasses the compilation
of essential documents such as the commercial invoice, packing list, certificate of origin, and any
other pertinent certificates. Compliance with customs procedures assumes paramount
significance, necessitating the accurate declaration of the tea products, diligent adherence to the
payment of relevant customs duties or taxes, and the provision of supplementary information as
necessitated by regulatory authorities. Furthermore, meticulous consideration should be given to
the proper packaging and labeling of the tea products, ensuring that they are suitably packaged
and labeled to preserve their quality and integrity throughout the transportation process. By
meticulously attending to these academic guidelines, tea exporters can enhance the efficacy of
their export operations and facilitate the seamless movement of tea products across borders.

2.7. EVALUATION

2.7.1. Strength

Vietnam possesses inherent advantages stemming from its natural conditions, particularly
the favorable soil and climate conducive to tea cultivation. These optimal conditions contribute
to the robust growth and high yield of tea plants, enabling Vietnam to become the prominent
exporter of tea to the Taiwan market. Moreover, Vietnam has a large, fertile, and nutritious
planting area that provides abundant nutrients, resulting in a substantial tea output. Furthermore,
Vietnam benefits from a large labor force characterized by a significant proportion of young
individuals. This demographic advantage ensures the availability of ample human resources for
various tea-related activities, including cultivation, harvesting, and production. The great and
skilled labor pool facilitates the seamless execution of tea production processes, ensuring
adherence to predetermined schedules and enabling Vietnam to meet the demand for tea exports
to Taiwan.
 Moreover,Vietnam has a fairly stable growth rate of tea export turnover in the Taiwan
market. The competitive pricing of Vietnamese tea compared to other options in the market can
attract cost-conscious Taiwanese consumers. Within Vietnam, tea occupies a prominent position
as one of the country's primary agricultural exports. Due to its importance and potential for
economic contributions, the government has continually adopted investment projects and
regulations intended to encourage and promote the tea industry. These proactive measures seek
to foster a conducive environment that encourages the growth, development, and
competitiveness of Vietnam's tea sector in the international arena, particularly within the Taiwan
market.

2.7.2. Weekness

Besides some strengths, there are still some weaknesses compared to competitors in the
Taiwan market that Vietnam needs to overcome.

Despite high tea output, Vietnam's tea quality still requires improvement due to factors
like outdated processing technology and inadequate care. As a result, Vietnamese tea exports
primarily consist of raw products with relatively low value compared to other countries.
Enhancing production techniques and quality control measures is crucial to elevate the quality
and market value of Vietnamese tea.

Currently, the country has about 450 tea processing establishments and factories
(registered), but only about 10% have their raw material areas. For the rest, most natural
materials of factories depend on traders to collect from many different sources, most of which
are produced by smallholder farmers, so it isn't easy to identify, trace, and control—pesticide
residues in tea raw materials. For-profit tea growers have increased the use of pesticides and
chemical fertilizers to increase yields without being controlled by any authorities in the
production process. Therefore, many shipments of Vietnamese tea products, when exported to
Taiwan, were returned due to residues of 2 active plant protection chemicals, Acetamiprid and
Imidacloprid, exceeding the permitted level.This issue underscores the imperative of
implementing rigorous quality control measures and enforcing compliance with safety standards
to rectify the situation and ensure the export of Vietnamese tea aligns with international
regulatory requirements.

2.7.3. Opportunities

Vietnam and Taiwan, as signatories of the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP), benefit from a range of preferential policies and favorable
conditions that facilitate export activities. Leveraging the advantages of CPTPP membership,
Vietnamese exporters, particularly in the agricultural and aquatic sectors, have experienced
increased opportunities for trade with the Taiwan market. This agreement has opened doors for
Vietnamese goods to access the Taiwanese market more easily, promoting bilateral trade and
fostering a mutually beneficial economic relationship between the two countries.

Taiwan's economy exhibits rapid growth and distinctive characteristics, which manifest in
a pronounced demand for imported tea. The country's dynamic economic landscape,
characterized by its unique economic structure and consumer preferences, has contributed to a
significant market for tea imports.

2.7.4. Threats

Vietnam's increased integration into the global economy has heightened its vulnerability
to global crises. The country's active participation in international trade and global value chains
means that it is more susceptible to the impacts of economic downturns, recessions, and other
global disruptions.

The level of competition in the Taiwan market is increasing, driven by various market
forces and factors.Both domestic and international businesses are actively vying for market
share, aiming to capture the attention and loyalty of Taiwanese consumers. Concurrently,
consumer expectations regarding product quality have witnessed a significant rise. Taiwanese
consumers are increasingly discerning and value-conscious, placing greater emphasis on the
overall quality, safety, and value proposition of the products they choose to purchase. This
evolving consumer demand for enhanced product quality creates a challenging yet rewarding
landscape for businesses operating in the Taiwan market.