FAO Wants Tea-Producing Countries to Drink More Tea

ROMEA new report from the Food and Agriculture Organization of the United Nations (FAO) urges tea-producing countries to increase income from the crop by marketing the drink more heavily at home and publicizing the health benefits of the beverage abroad. FAO also warned against  increasing the size of tea plantations which would damage prices in the long run.

According to the report, the export market in green tea will grow more quickly over the next 10 years than that of black tea, where the markets in major importing countries are unlikely to expand further as they are already nearly saturated.

Scope for expansion in consumption in traditional import markets like the United Kingdom and Russia is quite limited but in the countries where tea is produced the per capita consumption is much lower and so there is a lot more market potential, said Kaison Chang, Secretary of FAOs Inter-Governmental Group on Tea, the only international tea authority.

Consumers in tea-producing countries drink just a tenth of the amount of tea than those in mature import markets, representing a major opportunity for tea-growers if the right marketing strategies are employed.

The FAO Composite Price for tea, the indicative world price for black tea, increased by 13 percent in 2009, pushing prices to record levels last year due to drought in some of the major tea-producing regions of Asia and Africa. Prices have stabilized as weather patterns return to normal. The effect of this price increase on the consumer in developed countries was just 5 percent in 2009 because of intense competition in the beverages market.

In developing countries retail tea prices rose 12 percent during the same period. World black tea exports are projected to grow by 1.8 percent between now and 2019. Green tea exports are expected to grow as much as 5.5 percent per year. China is the worlds largest tea exporter, followed by Kenya, Sri Lanka and India.

Tea can be an important contributing factor to a nations food security, said Chang. In Kenya for example, receipts from tea exports covers the countrys entire food import bill.

Earnings from tea exports account for about 35 percent of total agricultural export receipts in Kenya and constituted 50 percent of agricultural export revenue in the next largest tea producer, Sri Lanka, covering around 60 percent of food imports.

The increase in the FAO Tea Composite Price in 2009 translated to a 7-percent increase in export earnings at the global level, significantly affecting rural incomes and household food security in tea producing countries, FAO said.

Black tea  accounted for 65 percent of total tea production over the past five years, 67 percent of consumption and 80 percent of trade. The acceptance of the health benefits of green tea over the past few years in developed countries has helped exports.