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

Sri Lanka celebrates International Tea Day 2024

Sri Lanka celebrates

 International Tea Day 2024 

As the world commemorates International Tea Day on 21 May, Ceylon Tea stands proudly at the forefront, celebrating its rich heritage, unparalleled quality, and global significance.

Renowned for its unique flavour profile and exquisite aroma, Ceylon Tea has captivated tea enthusiasts worldwide for generations. Originating from the lush hillsides of Sri Lanka, this beloved brew continues to enchant connoisseurs and novices alike, embodying a tradition of excellence that spans centuries.

International Tea Day serves as a poignant reminder of the profound cultural and economic impact of tea on societies across the globe. From cherished moments of relaxation to bustling tea auctions, tea plays an integral role in fostering connections and enriching lives.

Amidst the festivities, Ceylon Tea producers reaffirm their commitment to sustainability, community empowerment, and environmental stewardship. Through responsible cultivation practices and ethical sourcing initiatives, they strive to preserve the natural beauty of Sri Lanka’s tea-growing regions while empowering local communities and supporting livelihoods.

This year’s focus will shine a spotlight on women in the tea sector, highlighting their rich and diverse contributions across the supply chain

from crop to cup. 

Tea farming appeals to many smallholders, particularly women in developing countries, as it creates employment and generates year-round income. The event will also include tea tasting from different countries according to Sri Lanka Tea Board Chairman Niraj de Mel.

Courtesy: Daily FT

21st Inter-Plantation Cricket Tournament 2024

The 21^stInter-Plantation Cricket Tournament organised by the Dimbula Athletic & Cricket Club was held on 15/16 March 2024 at the Radella Cricket Ground. This cricket ground is considered unique being situated at a height of 4,000 feet above sea level and is one of the few cricket grounds in the world situated at this altitude. The Sri Lankan national Cricket team has used the ground and club facilities in the past when in need of preparation for away games prior to touring countries like Australia, England, New Zealand and South Africa.

The participant teams were as follows:

1.     Agarapatana Plantations PLC

2.     Bogawantalawa Tea Estates PLC

3.     Chilaw Plantations Limited

4.     Elpitiya Plantations PLC

5.     Hatton Plantations PLC

6.     Horana Plantations PLC

7.     Kegalle Plantations PLC

8.     Kelani Valley Plantations PLC

9.     Kotagala Plantations PLC

10.                        Malwatte Valley Plantations PLC

11.                        Maskeliya Plantations PLC

12.                        Maturata Plantations Limited

13.                        Namunukula Plantations PLC

14.                        Pussellawa Plantations PLC

15.                        Talawakelle Tea Estate PLC

An Exhibition match between the Dimbula Athletic & Cricket Club (DACC) and the DickoyaMaskeliya Cricket Club (DMCC) was played prior to the Cup Final which resulted in the hosts DACC emerging victorious over the visitors DMCC.

The Grand Cup Final between Talawakelle Tea Estates PLC and Elpitiya Plantations PLC was played under lights for the first time in the history of the tournament.

The Cup champions of the 21^stInter-Plantation Cricket Tournament for the 3^rdconsecutive year were Elpitiya Plantations PLC and the Runner-Up, Talawakelle Tea Estate PLC.

Maturata Plantations Limited emerged Bowl Champions, whilst Namunukula Plantations PLC were the Runner-Up. Malwatte Valley Plantations PLC emerged as the champions in the Plate Category and Pussellawa Plantations PLC were the Runner- Up.

Red sea attacks disrupts tea/coffee supply chain

Coffee and tea shipments are being rerouted to avoid the Red Sea following repeated drone and missile attacks. Shippers are heeding warnings to avoid the Bab el Mandeb strait at the southern entrance to the Red Sea where there have been 30-plus attacks on merchant vessels. Rerouting is inconvenient and costly but unlikely to seriously disrupt global supply chains.

Since December, a passage from the Gulf of Aden through the Suez Canal has become 1,200 treacherous nautical miles. Shipping companies rerouting to avoid the dangerous straits face higher labor and fuel expenses and costly war risk insurance premiums.

War risk premiums spike

The cost of insuring ships had increased significantly compared to October when shippers paid APs (additional premiums) based on 0.05% of the vessel’s hull value.

There are growing fears the conflict between Israel and Gaza-based Hamas will spread to Yemen and possibly include Iran, making a Suez passage too dangerous to consider.

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

alUnicodeMS;mso-bidi-font-family:ArialUnicodeMS;color:#1F4E79'>The United States market leads the organic tea market in terms of market share in North America.

ØUnited Kingdom’s organic tea market is another significant market in the European region.

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

Organic Tea Market Forecast: US$2.69 Billion by 2033

The organic tea market is expected to grow at 8.0% CAGR in next ten-year period. The market was expected to generate US$ 1.24 billion in revenue in 2023, with a value of US$ 2.69 billion by 2033.

With a rising awareness of the potential health benefits and environmental advantages of organic tea, the market is expanding to meet the growing demand for premium and ethically sourced tea products as follows:

ØRising demand for organic products, as well as an increase in the consumption of organic beverages such as matcha, herbal tea, and organic tea.

ØHigher consumption of organic back tea in India and organic and herbal tea in China. 

ØThe growing popularity of herbal, green, and organic tea for weight loss, and anti-cancer properties.

ØThe United States market leads the organic tea market in terms of market share in North America.

ØUnited Kingdom’s organic tea market is another significant market in the European region.

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

China tea exports fell in 2023

The value of Chinese tea exports fell by 16.3% to $1.74 billion year over year (y/y) in 2023 compared to $2.1 billion in sales recorded in 2022, according to China Customs. The decline is the second consecutive annual drop in exports by value. Export volume also declined by 2% to 367.5 million kilos.

Green tea experienced the biggest drop in value, declining from $1.4 billion in 2022 to $1.2 billion in 2023.

Sri Lanka, the number two producer by value, saw export value increase to $1.31 billion on a lower volume of tea than in 2022. Tea production, overall, increased by 1.7% to 256 million kilos. Sri Lanka maintained an average export price of $5.41 per kilo, up from $5.03 in 2022. Export volume declined by 8.2 million kilos to 242 million kilos in 2023. 

Kenya tea exports from January through November were valued at $1.05 billion and are likely to surpass the 2022 total of $1.4 billion. The 11-month volume was 511 million kilos. The harvest is 50 million kilos ahead of 2022 for the same period.

India and China accounted for 64% of global demand in 2023. A substantial glut of tea remains in Africa, where Kenya and surrounding East African tea-producing countries continue to expand production despite an oversupply of as much as 175,000 metric tons.

European tea suppliers no longer ship to Russia. Prompt payments for tea purchased from India and Sri Lanka are hampered by Western sanctions imposed on Russia and Iran following the February 2022 invasion of Ukraine. The conflict between Israel and Hamas in Gaza further destabilized tea markets in Jordan, Syria, Egypt, Turkey, and Iraq.

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