Kenya's tea exports on decline

The ongoing armed conflict in Sudan, as well as the Russia -Ukraine conflict, have affected Kenya's tea exports, stifling half-year exports amid low global prices.

 

Kenya exported 191,000 tons of tea worth 62.1 billion Kenyan shillings (about 432 million U.S. dollars) in the period ending June, a major decline from 243,000 tons valued at around 614 million dollars in a similar period in 2022. The 29 percent decline in the value of exports is due to lesser demand for Kenya's tea in the global market.

 

Despite the decline in volumes exported, tea production increased significantly in Kenya to stand at 273,640 tons in the six months, a rise from 271,300 tons in a similar period in 2022, due to favorable weather.

 

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

Inter-Africa trade to boost Kenya tea

Intra-Africa trade presents a big opportunity for Kenyan smallholder tea farmers to secure an additional market and improve their income.

 

According to Central Bank of Kenya, Africa accounted for only 19.4 per cent of Kenya’s Sh827.2

billion total trade value in the first three months of 2023, a slight growth compared to 18.3 per cent in 2022.

 

With about 1.4 billion people, Africa presents a huge market opportunity for Kenyan tea. At the global market, Kenyan tea is highly sought after and is commonly used to blend teas sourced from other countries.

 

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

Declining trend in tea prices encourage CTC tea production

A declining trend in the prices of orthodox leaf tea is reported to have prompted some manufacturers in North India with dual production facilities to convert their produce into CTC grades.

 

Orthodox prices in North Indian markets have been declining for quite some time and

this might have forced some producers to shift to CTC considering the domestic market demand for dust grades. This will lead to a situation where the dust offerings in the auctions would be on the higher side in the coming period. However, such a practice has not been reported from any South Indian auctions so far.

 

Meanwhile, orthodox leaf prices continue to decline in Kochi auctions. The prices continue to be lower with heavy withdrawals for almost all grades because of the subdued export demand from CIS and West Asia. The quality of tea also dropped due to rush crop because of rains.

 

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

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Bangladesh going for 3rd auction center

The country is going to have another tea auction center in Panchagarh within the next month, the north-western district bordering India, as the cultivation of tea in the plains is becoming popular. 

At present, there are two tea auction centers – in Chattogram and in Sylhet’s Sreemangal.

The number of tea gardens in the plains of Panchagarh and Thakurgaon is increasing day by day as they are bringing in more money for the farmers. 

Once the Panchagarh auction center starts operation, tea producers in the northern region of Bangladesh will benefit from reduced transportation cost. 

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

 

White Tea market to grow at 6.4%

The white tea market size is estimated to grow by USD 200.81 million from 2022 to 2027. The market is estimated to grow at a CAGR of 6.46%. The growth momentum will progress during the forecast period. 

APAC held the largest share of the market in 2022, and the market in the

region is estimated to witness an incremental growth of 58%. 

The demand for premium products in the region is rapidly increasing due to the increasing disposable income of consumers, and awareness for health and wellness among the people. Another factor that is driving the market is the growing popularity of the Internet and the increasing trend of online shopping. 

 

Source: PRNewswire/Yahoo Finance (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

UK tea plantation showcase Robot tea plucker

 

England's only tea plantation has showcased the world's first ROBOTIC tea harvester. The 'Tea bot' at Tregothnan in Cornwall, claims to be the first ever harvesting robot of its kind. Powered by solar panels, the driverless vehicle has already been put into practice.

 

Tea bot is available for purchase with 12 weeks delivery - for just £175,000.

 

It has a range of five miles, which includes approximately 10,000 tea bushes. It is the first time a machine is able to pick tea at a higher quality than a human. Tea bot has incredibly precise snipping blades and a completely joined up harvesting process that can pick around two tons of tea per charge.

 

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

 

 

 

 

Organic Tea market to hit $ 2.4 B by 2031

 

The global organic tea market was estimated at $905.4 million in 2021 and is expected to hit $2.4 billion by 2031, registering a CAGR of 10.5% from 2022 to 2031.

 

The region that dominated the global organic tea market in 2021 was Asia-Pacific, and this dominance is anticipated to continue throughout the forecast period. Health-related products are becoming more popular among consumers in China, India, Indonesia, and Japan. Compared to regular tea, organic tea is seen as being healthier.

 

Herbal and green tea are becoming more and more popular as ways to enhance one's

health and appearance. The market across Asia-Pacific generated nearly three-fifths of the global organic tea market revenue in 2021, and is anticipated to retain the lion’s share by 2031.

 

North America, on the other hand, would portray the fastest CAGR of 12.5% during the forecast period.

 

Source: EIN Press wire (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

Germany & Spain have opposite views on glyphosate

 

The agriculture ministers of Spain and Germany have opposite views on what the European Food Safety Authority’s (EFSA) recent verdict on glyphosate should mean for the decision on re-approving the contentious herbicide.

 

In early July, EFSA presented the main conclusions to its long-awaited risk assessment of glyphosate, the contentious but most widely used herbicide in the EU. According to the agency, ‘no areas of critical concern’ were found when it comes to potential harmful impacts of using the substance in plant protection.

 

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

 

Unrest Unsettles Kenya Tea Sector

Unrest is unsettling Kenya’s tea sector just as it began to steady itself after two difficult years of declining exports, high unemployment, and domestic conflict over the fast-rising cost of food and housing.

 

Curtailing operations cost Kenya’s tea industry millions of shillings a week in lost production. Availability has also impacted prices. Mombasa Tea Auction reported prices declined 5% following five weeks of political protests beginning in March.

 

Kenya accounts for 40% of sales at the Mombasa Auction. Shutting down the nation’s tea gardens would cost Kenya $2.5 million weekly in lost foreign exchange currency (KSh350 million).

 

Uncertainty led Tanzania ’s Ministry of Agriculture to announce in late May that Tanzania’s teas (valued at $38.8 million in 2021) would be sold at the digital auction based in Dar Es Salaam beginning in June.

 

Source: STiR C&T (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

  

 Container Rates Return to Pre-Pandemic Normal

 

The cost of shipping tea and coffee has declined to pre -pandemic rates as containers become more plentiful and prices dip to $850 TEU. The decline in shipping rates is due to slowing customer demand.

 

Container contract rates are near 2019 levels, and depleted tea inventories are increasing trade as the year progresses. At the height of the pandemic, spot rates for 40-foot containers loaded with tea travelling from Shanghai to Los Angeles surged to $12,172. The cost of transporting tea spiked again when the World Container Index (WCI) rose to $10,377 in September 2021.

 

Rates are now 36% lower than the 10-year average of $2,688 per 40ft container and falling. Container rates have been falling for months but have not hit bottom.

 

In late 2022, the average price for shipping a TEU to the EU from India was around $1,500. The average composite index for the year-to-date is $1,868 per FEU, which is $820 lower than the 10-year average of $2,688. While the WCI is 36% lower, indicating a return to more normal prices, rates remain 21% higher than average 2019 (pre-pandemic) rates of $1,420.

 

Source: STiR C&T (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

 

Ceylon Tea Wine to hit the market soon

 

Sri Lanka patented Ceylon Tea Wine is expected to hit the market as early as in two months. The patent for Ceylon Tea Wine has been sold to International Distillers Limited.

 

There is a big demand for Ceylon Tea and there will be a big demand for Ceylon Tea Wine. It has a good taste and aroma. The trials have been completed and the product is being readied for the market. 

 

Source: Economy Next (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

B’desh Tea Exports drops

 

Despite the steady growth in tea production over the past decade, Bangladesh's tea exports have taken a hit due to mounting domestic demand, driven by a growing population and urbanization.

 

According to the state-run Bangladesh Tea Board (BTB), tea production reached an impressive 94 million kilograms in 2022, marking a 53 per cent increase from the 62.52 million kilograms produced in 2012.

 

Yet, this growth didn't translate into booming exports. From the 2022 yield, a mere 0.78 million kilograms were exported, raking in Tk 196.31 million. This is a notable drop from 2020 when the country exported 2. 17 million kilograms of tea, earning Tk 347.14 million.

 

Simultaneously, sources reveal that the nation annually imports just shy of a million kilograms of tea. Insiders warn that if the current pace of domestic consumption persists, Bangladesh might need to import more tea in the coming years.

 

With 167 tea gardens spanning 280,000 acres and employing over 360,000 people, Bangladesh is the world's ninth-largest tea producer.

 

Source: Daily Sun (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

Kenyan increase investment in Orthodox Tea

 

Farmers are set to reap big after the Kenya Tea Development Agency began installing orthodox tea processing lines in 13 factories.

The initiative is set to increase farmers’ earnings as orthodox tea fetches high prices in global markets compared to the crush, tear, curl (CTC) tea.

 

Currently, only 10 KTDA-managed factories across all tea growing areas process orthodox tea.

 

Kenya is out to stamp its authority as the top exporter of orthodox tea to major markets across the world through the project, which will increase production and guarantee farmers high returns.

 

Currently a kilo of orthodox tea is fetching up to Sh 952 in the global markets compared to CTC tea, which fetches about Sh408 per kilo.

 

The tea sector was drastically affected by the prolonged drought that hit the country. This saw tea production in the months of January and February decline by 60 per cent.

 

Tea production has increased by more than 90 per cent from 62 million kilos to 117 million kilos in the last two months thanks to the rains.

 

 

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

 

 

Organic farming could slash agricultural emissions

 

Organic tea farming can play a key role in reducing the effects of climate change. By limiting the use of manufactured chemical fertilisers and pesticides, organic tea farming can work within natural systems to reduce the risk of environmental pollution and greenhouse gas emissions.

 

Organic methods are not only beneficial for the environment, but also for the tea farming industry as it confronts the challenges posed by climate change by using less energy than synthetic fertilizers derived from burning fossil fuels.

 

While sustainability is important in farming practices, so too is understanding the carbon footprint of the tea industry.

 

Climate change could have significant implications for tea production, especially in countries expected to be more affected by extreme weather and rising temperatures.

 

Source: MSN/The Nation (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

 

Germany plans to ban Glyphosate by end 2023

 

The continued approval of the widely-used herbicide glyphosate is a source of controversy both in Germany and the EU. While critics warn of considerable environmental and human health risks, proponents see no scientific basis for this.

 

In line with its coalition deal, Germany’s agriculture ministry has already taken steps towards banning glyphosate. Glyphosate should no longer be used in Germany after 1 January 2024.  

 

But that might not be so easy to achieve.

 

In the coming months, the EU is set to decide on whether it will renew its own authorization of glyphosate as an active substance in plant protection products, which is currently in place until 15 December 2023.

 

If glyphosate remains authorized in the EU after the end of the year, the German government can only impose restrictions on its use in specific cases or areas of well-founded reasons – rather than a general ban.

 

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

 

How China tea industry deals with climate change

 

The Chinese Academy of Agricultural Sciences has surveyed tea plantations all over China and says that last year’s drought had a devastating impact on the quality and health of the country’s tea trees. Thousands of acres of trees died. Some were so parched they turned burnt red.

 

China is the largest producer and exporter of tea in the world. In 2022, tea production reached a record 3.35 million tons, of which 375,000 tons – about $2.1 billion worth – were exported to countries around the globe, from the United States to Ghana.

 

Climate change poses an existential threat to this industry. Rising temperatures cause tea plants to produce more polyphenols, resulting in more bitter, less valuable tea. And a market defined by terroir – teas produced meters apart command wildly different prices – is facing the potential extinction of its most

famous tea-growing regions.

 

Extreme weather events are only projected to get worse in the future. One study, spanning six decades of temperature data, found that heat waves are getting hotter, becoming more frequent, and lasting longer in China.

 

As extreme heat, drought, and rainfall become more frequent and harder to predict, tea-growing regions will have to adapt to survive. That starts with rethinking cultivation practices to prioritize adaptability over raw production.

 

Source: Sixth Tone (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

Darjeeling tea demand drops in Europe

 

The Darjeeling tea industry is witnessing at least 10-15% fall in demand for its world-famous aromatic tea in Europe compared to last year, a contraction that has virtually coincided with Germany slipping into recession.

 

The total exports of Darjeeling tea last year stood at over 3 million kg. About 45-50% of the annual tea production generally gets exported. Europe and Japan are the two large overseas markets for this premium tea, the first product to get a geographical identification (GI) tag in India.

 

According to exporters, quantity off take this year is also low in Japan primarily due to weak yen. There is a lot of price pressure too. For Darjeeling first flush tea, there has been a shortage of high-quality crops and a surplus of mediocre quality due to erratic weather this year.

 

Up to the middle of April, the first flush crop had been down by 30% due to hot and dry weather conditions. Thereafter, the hills received abundant rainfall, resulting in a bumper crop during the end of April and first week of May. But this crop quality was low-medium.

 

Darjeeling tea production stood at 6.6 million kg in 2022 against 7.01 million kg in 2021.

 

Source: Financial Express (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka

 

 

Rwanda focus on promotion

 

National Agricultural Export Development Board (NAEB) has announced plans to focus on using technology and engaging youths in sustainable tea production, and promoting consumption following

impressive growth in the last ten years.

 

Statistics from NAEB show that tea production increased from 22,184 tons in 2012 to more than 38,000 tons in 2022 and foreign exchange revenues also increased by 90%, from $56 million in 2013 to more than $106 million this year.

 

For instance, in 2022 Rwanda’s tea sold at a premium price at the Mombasa auction, outdoing price offers from other regional countries as international buyers stay choosy on quality.

 

Market data from the auction shows the price of Rwandan tea at $3.02 a kilo in the sale held recently, against Kenya ’s tea at $2.72, Burundi ’s $2.44, Uganda ’s $1.27 and Tanzania ’s $1.15 for the same quantity.

 

Statistics from NAEB show that tea production increased from 22,184 tons in 2012 to more than 38, 000 tons in 2022 and foreign exchange revenues also increased by 90%, from $56 million in 2013 to more than $106 million this year.

 

Source: KT Press (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka