Unlocking the full potential of Lao PDR’s tea sector

Policy Brief

Unlocking the full potential of Lao PDR’s tea sector

Tea plants are native to East Asia and evidence of tea consumption in China goes back to the 2nd century BC. In Laos, tea was presumably cultivated and traded as early as the 7th century (Earth Systems, 2016). Forest tea, which includes both ancient and wild tea1, has been grown in Northern Laos for centuries (Marseille, 1990). In the 1920s, the French brought tea from Vietnam to cultivate on the Bolaven plateau and recognized the quality of wild forest teas from Xieng Khouang (Pedersen et al., 2016).

Tea production in the Lao PDR

The development of the tea sector was halted in the 1930s by a preferential trade agreement between the British and the French. While commercial tea production came to a stop, traditional tea cultivation remained, although at a much lower scale. In the early 1990s tea production resumed after the adoption of the “New Economic Mechanism” in 1985 and the development of private tea companies. It was however not until the early 2000s that growth in Chinese demand boosted the tea sector again. While more efforts need to be taken, the tea sector has been developing.

The Government of Laos has acknowledged the great potential of the tea sector to alleviate poverty and for rural development in Lao PDR. The 8th National Social and Economic Development Plan recognizes the potential for the tea sector to generate value within the country, encourages the development of local tea factories in selected provinces as well as foreign investment in industrial tea plantations. The Agricultural Development Strategy to 2025 focuses on developing tea production in the Northern
Uplands and on the Boloven Plateau and encourages tea certification (organic, GAP).

Today, the main tea production areas of Laos are located in the Northern Uplands. Phongsaly and Luang Prabang Provinces are the leading provinces in terms of area of tea planted. Smaller yet well-established tea production areas may be found in other areas, such as Paksong district (Champassak province) or in Peak district (Xiengkhuang province).