Unlike in previous years, farmers in Lam Dong, a province in Vietnam’s Central Highlands region that is being dubbed as the country’s tea growing kingdom, find themselves in a critical stage as their products can not find buyers, forcing them to log down large plantation areas right at the season of harvest.

With a cutter in his hands, Nguyen Van Dac, a farmer living in Dam Bri commune in Lam Dong province’s Bao Loc city, looks over his vast Oolong tea fields with tears in his eyes.

Dac’s family has been growing Oolong tea on a 1,800 square metre area. After more than two years of toiling on the vast tea fields, racking up a cost of nearly VND100 million ($4,600), his family reaped the first harvest.

However, only the first two harvests generated profit. In the past three harvests, his family’s fresh tea leaves and buds remained unsold because their buyers in the previous years all refused to buy more or only bought a fraction of his supply due to their bleak business.

“We had to dump the products in a bid to recover part of the investment. However, this time around my family could not afford to wait any longer and we decided to replace the tea fields by more profitable crops,” Dac shared.

Tran Thi Hanh, another farmer from Loc Tan district, said, “Not only my family, most other Oolong tea growers here were bogged down in difficulties when we had to sell fresh buds below the production cost.”

As of now, one kg of Oolong tea fetches around VND7,000 (32 US cents). For farmer households with large tea fields that have signed contracts with businesses on growing quality tea, the standard price is about VND17,000 per kg (78 US cents) against VND30,000 ($1.4) per kg in the previous season.

According to tea material trader Nguyen Thanh Hoa, the flat sales were because of the difficulties in the export of Oolong tea to Taiwan, the consumer of 95 per cent of Vietnamese exported tea.

Not only Bao Loc tea farmers were affected, farmers at another well-known Oolong tea growing site in Lam Dong, in Cau Dat (Da Lat city), are in a similar situation.

The expanse of the slowdown reaches  beyond individual farmers: large scale tea growing firms holding selling contracts with processing plants share the same fate.

“The tea plantation is all I have. If the situation does not improve, I don’t know how long I will be able to stay afloat ,” said Vuong, the owner of a company growing and trading in tea products.

“While waiting, each day costs about VND6 million ($275) to maintina the tea field,” Vuong added.

Han Wen Te, director of Fusheng Tea Company Limited, said that the company had stopped operations on September 2015 due to failure in finding the necessary output market for Oolong end products.

The Taiwanese director shared that his company now has about 70 tonnes of unsold Oolong tea and they have stopped buying tea materials from farmers to partly shift into orchards trading.

According to Nguyen Van Son, deputy general director of the Lam Dong Department of Agriculture and Rural Development, Lam Dong is home to about 24,000 hectares of tea plantation area, accounting for 22 per cent of the country’s total. The province’s output is more than 230,000 tonnes, equal to 32 per cent of the country’s total.

There are 65,000 tea growers and 260 tea processing plants in the province.

From early last year until now, provincial farmers have logged down their Oolong tea areas due to the difficult output market.  

Son attributed the situation to wide-spread rumours that Lam Dong tea products were affected with dioxin (late 2014) and that tests found beyond-permissible levels of pesticides (April 2015).

Moreover, the market has seen an unhealthy competition between firms producing Oolong tea in Taiwan and Lam Dong-based Taiwanese firms, making it hard for the competent Vietnamese agencies to deal with the situation.

Regarding a remedy, Son said, “Our department has requested firms to buy tea from farmers with deferred payment and support farmers with fertiliser and other materials.”

“We will shortly host a meeting between Lam Dong People’s Committee, Chinese Taipei Economic Office in Ho Chi Minh City, and the Taiwanese Tea Association in Lam Dong to seek a suitable way out.”

VIR