Supply Chain Disruption Inadvertently Gives Tea Market a Boost

A trifecta of colder weather, pandemic-induced labor shortages and supply chain disruptions has created a tea market shortage that may provide a needed short-term boost.

 

The global tea market has been depressed over the last few years due to an excess supply, but the coronavirus pandemic has created labor and supply chain disruptions during a time when there is a surge in demand. As more people globally are confined to home, demand for the healthy beverage – which is consumed in quantity second after water – has increased.

 

China, India, Kenya, Sri Lanka and Vietnam account for 82% of global tea exports, and according to a new Reuters article, labor lockdowns caused by the pandemic and colder-than-usual weather in 3 out of the 5 countries have disrupted the leaf-picking season, delaying shipments and creating price hikes as demand for the beverage climbs in other countries. Even Turkey, which globally consumes the most tea but usually produces its own supply, has been struck by labor shortages due to a lack of migrant workers.

 

Air freight, ocean freight, and land transport have all been disrupted by the pandemic, and loss of labor due to sick workers or stay-at-home restrictions are impacting the food supply chain everywhere. Other recent developments such as the impact of meat processing plants that have begun to close, only to be mandated to remain open in the U.S., and excess milk and produce going to waste at the source, show the somewhat tenuous nature of the global food supply chain.

 

Although the surge in demand of the hot tea market is expected to be short-term, the good news is that while it lasts and prices are up, it is giving “much needed support” to the industry.

 

Courtesy: www.profoodworld.com

Ceylon Tea Sustainability - International Tea Day 2020

Around 20% of teas sold around the world are sourced from Sri Lanka! Ceylon tea refers to tea that is produced in its highlands. An independent panel of tea tasters is responsible for assessing the quality of Ceylon Tea prior to auction and export. 

TURKISH TEA FARMERS BUCKLE

Tens of thousands of Georgian workers are unable to access Turkish tea plantations while the border remains closed. Cultivators are anxious over debt and further privatization. The Turkish border is now sealed and the Georgians’ jobs another mass casualty of COVID-19. Some 200,000 families who live off of tea are now suddenly struggling to find workers in the ageing communities of northeastern Turkey. This may accelerate the privatization of the country’s last state-dependent crop. Turks drink more tea than any other nation, an estimated 1,300 cups per person annually. The Rize commodity exchange, which represents private buyers, has recommended the agriculture ministry set prices low, but raise monetary support to farmers and loans to private companies. On May 11, President Recep Tayyip Erdoğan announced a base price for tea leaves at 3.27 lira (about $0.50) per kilo.  Yet to encourage constant production and sale, reserve volumes have been dropping and are now at an all-time low.

 

Courtesy Tea Brokers East Africa Limited

About F&W

Forbes & Walker was set up in 1881 as a partnership between James Forbes and Chapmen Walker. Although there is no actual record of the date on which it was established the very first cash book, still in the possession of the Finance Director, indicates the brokerages were earned from 1st August 1881. In Sir Thomas Villiers' book “Mercantile Lore” the date of establishment of Forbes & Walker has been put down      Read More...

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