Vietnam’s Leadership in Cinnamon Exports
Vietnam has emerged as a global leader in cinnamon export turnover, solidifying its position in the international spice market. In the first half of this year alone, the country earned nearly $300 million from cinnamon exports. Despite producing only 41,000 tons of cinnamon annually—significantly less than significant producers like Indonesia and China—Vietnam commands a substantial share of the global market. This report explores Vietnam’s success in cinnamon exports, the challenges faced by the industry, and the implications for exporters.
Global Cinnamon Production Overview
Cinnamon is one of the world’s most precious spices, cultivated in only a few countries, including Indonesia, China, Vietnam, and Sri Lanka. Vietnam’s cinnamon is predominantly grown in provinces such as Yen Bai, Lao Cai, Bac Kan, Quang Ninh, Quang Nam, Quang Ngai, and Thai Nguyen. The global cinnamon production stands at approximately 242,000 tons annually, with 154,000 tons traded in the international market. Vietnam, despite its relatively modest output, has leveraged its high-quality cinnamon to become a leading exporter.
Vietnam’s Dominance in Cinnamon Exports
Vietnam’s cinnamon accounts for 18.2% of the global production but an impressive 34.4% of the world’s cinnamon export market share. In 2022, Vietnam’s cinnamon exports exceeded $292 million, underlining the country’s dominant position. This success is attributed to Vietnam’s strategic focus on export markets, with Vietnamese cinnamon being exported to nearly 100 countries. Notably, Vietnam holds 95% of the Indian market, 36.5% of the US market, and 35% of the European market.
Import-Export Trends
- While Vietnam is a leading exporter, it also imports significant quantities of cinnamon, primarily from China and Indonesia.
- In June 2024, Vietnam imported 282 tons of cinnamon, marking a 26% decline from the previous month.
- For the first half of 2024, cinnamon imports totalled 2,734 tons – a significant decrease from the previous year.
- China remains the largest supplier to Vietnam, accounting for 43% of the import structure.
- In 2023, Vietnam’s total cinnamon imports reached 14,806 tons, primarily from China and Indonesia.
Challenges Facing the Vietnamese Cinnamon Industry
Despite its leadership in cinnamon exports, Vietnam’s cinnamon industry faces several challenges. The production process remains fragmented, leading to inconsistencies in quality. Issues such as the presence of heavy metals and pesticides further hinder Vietnamese cinnamon’s competitiveness on the global stage. Additionally, the export portion of processed cinnamon is low, accounting for only 18.6% of total exports. This indicates a need for better processing techniques and value addition.The industry also struggles with weak links between processing and exporting enterprises and cinnamon growers. This disconnect affects the industry’s ability to scale and fully capitalize on its potential. There is also a lack of comprehensive studies on the potential value of cinnamon by-products and opportunities in the carbon market, which could offer new revenue streams for the industry.
Opportunities for Exporters
Vietnam’s position as a leading cinnamon supplier presents significant opportunities for exporters. However, to maintain and enhance its competitive edge, the industry must urgently address its challenges. Exporters should focus on improving quality control, enhancing processing capabilities, and fostering stronger relationships with growers. Additionally, exploring value-added products and sustainable practices, such as carbon credits, could open new markets and increase profitability.
Vietnam’s success in the global cinnamon market is a testament to the country’s strategic focus on quality and export growth. However, the industry must address its internal challenges to sustain and expand its global presence. By improving production quality, enhancing processing capabilities, and strengthening ties between stakeholders, Vietnam can further solidify its position as a global leader in cinnamon exports. Exporters have a vital role to play in driving this growth and capitalizing on emerging opportunities.
