5. PROJECTED BLACK TEA EXPORTS
(Thousand tonnes)
(Growth rate: 1.5 % p. a.)
1295
1521
2011 2021
6. PROJECTED GREEN TEA EXPORTS
(Thousand tonnes)
(Growth rate: 5.8 % p. a.)
295
516
2011 2021
7. 7
CONCLUDING REMARKS
The review of the world tea market indicates an
improvement in the fundamental oversupply situation
which has persisted in recent years underpinning current
firm prices.
The increase in tea prices resulted in an estimated 2.2
percent increase in export earnings in 2011 at the global
level, significantly affecting rural incomes and household
food security in tea producing countries.
In the context of food security, tea export earnings in 2009
account for about 36 percent of total agricultural export
receipts in Kenya and 62 percent of agricultural export
revenue in Sri Lanka. In addition, export earnings from tea
paid for about 61 percent of Kenya’s food import bill,
while in Sri Lanka tea exports covered the country’s entire
food import bill.
8. CONCLUDING REMARKS
The ratio was relatively small for other producing
countries, but remained significant. For example,
even though domestic consumption accounted for
a larger share of total production in Indonesia,
export value in 2010 was USD178 million and in
Tanzania tea exports earned the country USD 48
million.
In the medium term, the projections suggest that
supply and demand of black tea will be in
equilibrium in 2021, at a price of USD 2.75 per Kg, if
there is no supply over-reaction to the current firm
prices.
8
10. Concluding Remarks
However, if there is an over reaction to recent
high prices which, for example, would result in
a 5 percent increase in production, the results
can be quite different. Here the clearing price
would be 17 percent less than the baseline
price at USD 2.54 per Kg.
If the reaction to the current high prices is
even stronger, resulting in a say 10 percent
increase in production over the baseline
increase, then prices could be 38 percent
lower.
13. Concluding Remarks
Therefore, caution needs to be exercised.
Greater efforts should be directed at
expanding demand. For example, there is
scope for increasing per capita
consumption in producing countries as
they are low compared to traditional
import markets.
The IGG on Tea has encouraged
diversification into other segments of the
market, such as organic tea.
14. 14
Concluding Remarks
The health benefits of tea consumption
should be used more extensively in
promoting consumption in both
producing and importing countries.
However, in targeting potential growth
markets, recognition of and compliance
with food safety and quality standards is
essential.
15. 15
Thank you
Represented by Iwan Cahyo Suryadi
Data from Price Monitoring and Analysis Tool, FAO
http://www.fao.org/giews/pricetool/