1
World Tea Production and Trade :
Current and Future Development
By Kaison Chang – Secretary
FAO Intergovernmental Group on Tea
2
Introduction
• Current market situation and outlook to 2023;
• Response to questionnaires by member
countries, supplemented by other sources;
• Macro-economic data from the IMF, World
Bank and OECD.
3
INTRODUCTION
• Grateful to Argentina, India, Indonesia, Kenya,
Malawi, Sri Lanka, United Republic of Tanzania,
and Vietnam;
• Cooperation promotes:
▫ Improving market transparency;
▫ Fostering market expansion; and
▫ Value chain enhancement.
• Delegates to review the information presented in
document CCP: TE 14/Inf. 3 with its annexed
tables 1 to 9, and amend and supplement these
where necessary, with updates pertaining to
their countries.
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World Production of Tea, 2009-2013
6000
thousand tonnes
5000
4000
3000
2000
1000
0
2009
2010
TOTAL TEA
2011
BLACK TEA
2012
GREEN TEA
2013
5
World Exports of Tea, 2009-2013
1800
thousand tonnes
1750
1700
1650
1600
1550
1500
1450
1400
2009
2010
2011
2012
2013
6
World Consumption of Tea, 2009-2013
5000
4500
4000
thousand tonnes
3500
3000
2500
2000
1500
1000
500
0
2009
2010
2011
2012
2013
7
8
Actual and Projected Black Tea Production
(thousand tonnes)
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2013
2023
9
Actual and Projected Green Tea Production
(thousand tonnes)
3500
3000
2500
2000
1500
1000
500
0
2013
2023
10
Actual and Projected Black Tea Consumption
(thousand tonnes)
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2013
2023
11
Actual and Projected Black Tea Exports
(thousand tonnes)
1600
1400
1200
1000
800
600
400
200
0
2013
2023
12
Actual and Projected Green Tea Exports
(thousand tonnes)
700
600
500
400
300
200
100
0
2013
2023
13
Concluding Remarks – Production and
Exports
• Tea trade increased 5%: earnings by 10% to USD
5.7 billion;
• Contribution to food import bill:
▫ Kenya at USD 1.3 billion > 50%
▫ Sri Lanka at USD 1.55 billion = 71%.
• Others :
▫ Indonesia = USD 155 million; Tanzania =USD 61.4
million.
• Trickle down effects to rural incomes and
household food security were invaluable.
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Concluding Remarks – cont’d
• Weaker Composite Price, mostly due to CTC
auction prices, and if there is no correction, this
downward trend will continue;
• Growth in demand is in green and specialist tea
segments;
• In the medium term, the projections suggest that
supply and demand of black tea will be in
equilibrium in 2023 at a nominal price of USD
2.81 per Kg. Real price will be lower.
15
FAO Tea Prices USD/Kg Baseline Projections
3.5
3
2.5
2
1.5
1
0.5
nominal prices
real prices
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
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Concluding Remarks – cont’d
• However, if there is no correction in supplies
and assume that output increases a further 5
percent, the impact on prices would be quite
dramatic;
• A 40 percent decline over the next 10 years
reaching USD 1.82 per Kg in 2023 or an average
of USD 1.60 for the decade.
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3.5
FAO Tea Prices USD/kg
5 percent increase in World Production
3
2.5
2
1.5
1
Base Prices
Simulation prices
0.5
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
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Concluding Remarks – cont’d
• However, if the reaction to the declining prices
were to cut back on production, say by 5 percent
less than the baseline, then prices could be 27
percent higher for the decade reaching USD 3.4
per Kg in 2023 .
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FAO Tea Prices USD/kg
5 percent decline in World Production
4.5
4
3.5
3
2.5
2
1.5
Base Prices
1
Simulation prices
0.5
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
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Conclusions
• Caution needs to be exercised;
• Greater efforts should be directed at expanding demand,
particularly in producing countries with relatively low
per capita tea consumption and relatively strong
economic growth, as consumption is already high in
traditional markets;
• Diversification into other segments of the market such
as organic tea should also be encouraged and the health
benefits of tea consumption should be used more
extensively in promoting consumption in both producing
and importing countries. However, in targeting potential
growth markets, recognition of and compliance with
food safety and quality standards is essential.
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Thank You!