Climate-smart tea seed variety introduced – India

To combat the ill effects of climate change, a climate-smart new seed variety ‘TSS 2’ which can withstand high temperatures and yield quality crops has been introduced.

 

This new seed variety has been introduced at a time when tea production is down by 80 million kg till now in 2024 due to extreme heat and climatic factors.

 

Extreme heat is making a significant impact on tea plantations in Assam and north Bengal, the two largest tea-producing regions in the country.

 

The traditional tea-growing calendar is being disrupted due to erratic weather patterns. Tea plants require a balance of warmth and moisture, but prolonged heat can dry out the soil, stressing the plants and stunting their growth.

 

 

Source: Business Standard (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Ethiopia witnesses 34 % growth in tea industry

Ethiopia’s tea industry recorded a 34 percent growth in the 2023/24 fiscal year, with exports surpassing 1,142 tons and generating US$ 2.33 million in revenue. This marks an increase of 292 tons compared to the previous year’s exports.

 

Despite exporting 50,000 tons of tea leaf, there is still untapped capacity in the sector. Historically, Ethiopia’s tea production was limited to 5,000 hectares of land, with foreign exchange earningsnever exceeding US$3 million annually.

 

In an effort to expand the industry, 460 million tea saplings were planted across 30,000 hectares during the2023/24 fiscal year.This follows a 2016 initiative that saw over 7,813 hectares planted with tea seedlings, contributing to anationwide total of more than 48 million seedlings.

 

Tea is recognized as a strategic crop providing both foreign exchangeearnings and employment opportunities.

 

 

Source: African Business News (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

China warns investors in herbal ingredient market

China’s Administration for Market Regulation recently published anti-monopoly guidelines for thepharmaceutical sector, including teas and herbs used in Chinese Traditional Medicine (TCM).

 

The guidelines suggest closer scrutiny of unregulated tea and herbal ingredientmarkets.

 

Investment activity in tea and herbshit arecord high in July as some medicinal leaves, roots, and bark tripled in price.

 

Trading has been brisk in the premium Pu'er sector of the tea market. Experts say Pu’er, typically sold in 137g “cakes,” improves in quality as it ages. Pu’er cakes are traded and collected much like vintage wine.

 

The tea futures market is and alwayshas been highly unregulated. No one except the participants oversee it. Investors should be on high alert.

 

 

Source: STiR Coffee & Tea (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Fertilizer for Kenyan smallholder farmers

The Kenya Tea Development Agency (KTDA) has procured the first of two batches of a total of nearly 97,000 metric tons of NPK fertilizer on behalf of r smallholder teafarmers with the second consignment to follow shortly.The amount procured is an increase from the 88,000 metric tons procured last year.

 

The NPKchemically compounded fertilizer will be bagged at the port and distributed to farmers, ensuring efficient and timely delivery for farm application. Applying fertilizer at the start of the short rains is crucial for maintaining the high quality and quantity of green leaves required for premium tea production.

 

The final cost of the fertilizer which will be will be determined by severalfactors, including the cost of natural gas (a key component in manufacturing NPK fertilizer), exchangerates, shipment costs, marine, and overland insurance costs, as well as clearing and transportation coststo the respective tea factories.

 

 

Source: The Star (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Catechin market to reach $ 31.9 million by 2033

The global catechins market is expected to develop significantly, with a value of USD 18.5 million in 2023. ACAGR of 5.9% is predicted to be maintained by the year 2033. Such consistent growth estimates indicatethat the worldwide catechins market is on pace to achieve an astounding valuation of USD 31.9 million by2033.

 

Catechin, a polyphenol primarily found in green tea leaves, is significantlyimpacted by the changingdynamics of the polyphenols market. Key drivers influencing this market include the escalating demand forfunctional foods and beverages and advancements in polyphenol extraction processes. Such factors play apivotal role in driving the growth of the catechin market.

 

Catechin has gained extensive usage in the functional food and beverage market, primarily due toconsumers’ growing inclination toward adopting a healthy lifestyle.

 

Green tea enjoys widespread consumption in countries such as China, Japan, India, and the United States.Green tea is increasingly recognized for its medicinal properties and high antioxidant content.

 

 

Source: Future Market Insight (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

China’s Tea Export marketing push

China’s $111.5 billion domestic tea market dwarfs all others, but exports have declined over the past two years and are still flat midway through 2024.

 

In response, China has stepped up its marketing to stimulate demand and lowered prices to maintain volume growth.

 

Volume growth has recovered after the blazing sun scorched central China's tea producing regions in four successive heat waves in 2023, lowering yields and the quality of the summer harvest.

 

A 4.8% decline in the compound annual growth rate (CAGR) of overall value sales for tea from 2024 to 2027 is estimated and overall sales will reach $72.5 billion in 2027.

 

Export volume is up a modest 1.2% overall through April 2024. Green tea exports are expanding at 5.6%. However, prices for green tea are down 17.4% compared to 2023 and $3.60 per kilo for April 2024.

 

Exports of black tea are soaring as volume rose 21.3% over the same period last year. 

 

Source: STiR Coffee & Tea (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka 

Nearly everyone in UK still drinks tea

The United Kingdom stands out as a nation where tea is a staple, with a significant portion of the population across all income brackets consuming a cuppa daily.

 

In May, it was revealed that 98% of UK residents drink tea daily. More than 100 million cups of tea are drunk every day in the UK,which estimates consumption at 36 billion cups per year.84% pick the option of a tea bag to make their black tea, with 16% opting for loose leaf.

 

The 2024 Tea Census show that the age cohort most likely to prefer loose-leaf black tea was the 30-44-year-olds (27%), compared with 16% of 18-29-year-olds, 12% of 45-59-year-olds, and only one in 10 (10%) of those aged 60+.

 

Young tea drinkers appreciatethe fantastic benefits for avoiding cardiovascular disease, improving muscle strength, and the anti-stress properties of polyphenols.Targeting youth may be the most important thing for the industry.

 

The UK market is valued at £1.7 billion ($2.2 billion). The global market is expanding and will be worth an estimated $134.4 billion by 2025 and tea production is nearing 6.7 million tons.UK consumption at 72 million kilos annually, excluding herbal infusions, ready-to-drink, and instant tea.

 

The UK is also a significant processor and exporter. The top three exporters, China, Kenya, and Sri Lanka, each reported more than $1 billion in trade value.

 

 

Source: STiR Coffee & Tea (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Too Much Tea - Economic disequilibrium in global black teamarkets?

Weather patterns highly influence short-term availability, which has recently been aggravated byuncertainties arising from climate change. Periods of oversupply are traditionally short-lived partly becauseof natural disasters, from unprecedented deluges that cause flooding and landslides to heatwaves anddroughts that lower yield.

 

Tea rebounds quickly in times of scarcity – too quickly, it appears, as rising stocks of black tea have createda price-paralyzing surplus in Kenya and other bulk black tea growing countries.

 

No one can do much about the weather, but they can influence demand. Global tea consumption has risensteadily for decades, and isexpected to continue at a projected 2% growth rate through 2030.

 

Tea’s compound annual growth rate (CAGR) is currently 2.74%, driven mainly by increasing affluence,expanding population, and rising health awareness, illustrated by the double-digit spike in sales during theCovid-19 pandemic when relieving stress and fear led to health and wellness beverage preferences thatfavored tea.

 

Tea prices have been static for 15 years. The wholesale price paid for tea hasroughly doubled from $1-$2 per kilo in the 1960s to $2.75 per kilo in the 2020s.

A futures market for tea has been studied, but wagering on predictable price swings has little appeal.Establishing an OPEC-like organization for tea resurfaces periodically. The organization would coordinateand unify tea production. Member country policies would stabilize tea markets and secure an efficient,economical, and regular supply of tea with a fair return on capital to those investing in the industry. But unlikeoil, you cannot switch the tap on and off for tea.

 

Grocers eagerly stock tea.In developed countries, 80% of tea is sold in supermarkets, where fierce competition and steadyinnovation keep a lid on tea prices. Grocers chafe when accused of forcing down prices, denying growerstheir due. The truth is that specialty and finegrade tea in tins, tea bags, and sachets generate highturnover in sales at good margins.

 

Demand has risen steadily for decades, and production has kept pace, but tea is challenged by innovativebeverages vying for its enviable share of throat. A study explains how to energize price growth bymarketing quality tea both as the original, affordable, plant-based drink and as a specialty crop grown forspecific culinary and beverage uses, from artisanal hand rolled high-priced Orthodox (loose leaf and inbottles) to concentrates and powders used in cosmetics, supplements, and functional blends.

 

 

Source: STiR Coffee & Tea (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

North India crop shortage 60 million kg

The North Indian tea industry is facing a production shortfall of 60 million kgs till June of the current crop year over the corresponding period last year due to adverse weather conditions.

 

The loss of the first and second flush crops, which produce the highest quality teas of the year, will undoubtedly impact the producers' revenue and may push tea prices higher.

 

The states of Assam and West Bengal, which comprise the North Indian tea industry, are experiencing a precarious situation. Excessive heat coupled with a rain deficit in May, followed by excess rainfall and a lack of sunshine, has severely impacted production.

  

Source: Business Standard (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

Assam faces fungal disease threat

Assam's tea industry is facing a significant new threat as a recently identified fungal disease begins to impact tea leaf quality and production. This marks the first report of Lasiodiplodia theobromae-induced leaf necrosis in India. The fungus was also earlier reported in China.

 

Leaf necrosis affects the upper parts of tea leaves, causing them to turn brownish and rot. Conventional fungicides are ineffective against Lasiodiplodia theobromae, presenting a significant problem for tea garden owners.

 

The rapid spread of this disease could potentially lead to more than a 50% loss in tea production if not effectively controlled.

 

 

Source: East Mojo (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

Tea Producing countries discuss falling tea prices

Tea-producing countries have proposed new regulations similar to those that dictate oil prices in the wake of low prices of the green leaf in the international market.

 

Leading tea producers in Africa, including Kenya, and Asia attribute the low prices to overproduction, which they insist should be controlled to ensure better returns and maintain quality. 

 

Due to increased large-scale production of tea, the amount produced in 2023 stood at 6.603 billion kilograms, while consumption stood at 6.233 billion kilograms. Tea shipments from Kenya, China and India increased, while deliveries from Sri Lanka (the second-largest exporter of black tea) declined.

 

The increasing impact of climate change is partly to blame for the declining tea quality as it is adversely affecting the tea sector globally.

 

The global tea industry is facing a demand and supply mismatch as production continues to outpace demand with demand in the traditional tea-consuming nations of Europe and Asia stagnating. 

 

Tea prices across all black tea auction centres have stagnated over the last few years as well. 

 

Conflicts in the Red Sea and the Gulf of Aden are also said to have exacerbated tea buying and export challenges due to increases in logistics costs and shipping disruption.

 

Source: Standard Media (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

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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