Dear Valued Clients and Partners,
As the global demand for Vietnamese cinnamon continues to grow, key developments in both policy and climate are shaping the short-term market outlook. At First Crop, we are committed to keeping our customers informed so you can act decisively and stay ahead.
Important Market Factors to Note:
1. 5% VAT Implementation on Cinnamon Exports
Effective 1st July 2025, the Vietnamese government is introducing a 5% Value Added Tax (VAT) on cinnamon exports. This measure will have a direct impact on export pricing, leading to an increase in the cost of goods for international buyers.
2. Monsoon Season Impact on Harvesting & Drying
July and August bring heavy monsoon rains across Vietnam’s cinnamon-producing regions. As a result:
– Harvesting activities have nearly come to a halt in forest areas.
– Lack of sunlight is disrupting the natural air-drying process, a vital step in preserving the quality and aroma of cinnamon.
3. Rising Ocean Freight Rates
Recent hikes in global ocean freight costs are further intensifying the price pressure on shipments.
Forecasted Price Movement
Given the above challenges, First Crop expects an increase of at least USD 150–200 per metric ton over current cinnamon export prices. Market relief is anticipated only with the arrival of the autumn harvest in October.
Our Recommendation
To mitigate the risk of higher costs and limited supply, we strongly encourage clients to confirm and reserve their shipments as early as possible.
We are here to support your sourcing needs with integrity, transparency, and unwavering commitment to quality.
