“In a world with amazing amounts of statistics and demographics available, if you don't utilize foresight, statistics, demographics, projections and predictions the competition will.”(Akutra-Ramses Atenosis Cea)
The International Tea Committee collates the statistics of the tea trade – the production, consumption, exports, imports etc. providing valuable information for everyone working in and interested in the trade. With over sixty countries producing tea, and people in over 195 countries drinking it the statistics collated by the ITC from across the world provide plenty of useful information to help to develop both production and marketing strategies.
World tea production continues to grow - in 2018 it grew by over 158,000 MT. It has doubled in twenty years. The 2018 annual production of almost six million metric tons (5,856,414 MT) means that in theory there are approximately 780 grams available for each person in the world – assuming everyone drinks the same quantity – one weak cup of tea per day!
The 2018 figure represents close to a 3% increase on 2017 production and can mainly be attributed to China and Kenya where crops increased by 119,588 MT (5%) and 53,141 MT (12%) respectively. Malawi also recorded a significant increase in production, up 11% (5,006 MT) producing over 50,000 MT - the first time since 2010. Kenya’s figure is particularly significant as it is not only their highest crop ever but it represents an increase of almost 100,000 MT on 2015’s production. India, Sri Lanka, Vietnam and Indonesia, however, all recorded slightly reduced crop figures in 2018.
Although Kenya saw a significant increase on last year’s production it is important to note that production in 2017 was 33,000 MT down on 2016. Production in 2018 was therefore only 20,000 MT (4%) higher than that of 2016. Since 2010 when crop reached a high of 399,006 the Kenya crop figure has only been above 400,000 on five occasions (2013, 2014, 2016, 2017 and 2018) - the average production over the last ten years being 414,331 MT. This growth has been driven to a major degree by the planting programmes which have resulted in the area under tea in Kenya expanding by nearly 50% between 2008 and 2017.
I have highlighted Kenya because they are the largest exporter of tea. In 2018 world exports of tea rose by about 3.5% the largest increase since 2013 but total world exports remain low at only 31.6% of total production (2017 – 31.4%; 2016 32.3%; 2013 – 37.2%). China’s exports increased by less than 10% of its increase in production. Imports into Russia, UK, North America, and Africa all fell. Small growth was evident in the other CIS countries, the rest of Europe, Latin America, and Oceania, while the largest increase in imports was in Asia and major Producing Counties who together imported an additional 36,000 MT in 2018.
Latin America, Africa and the continent of Europe are exciting if challenging markets for tea. Imports to both France and Italy are rising slowly. The progress being made by tea in these two countries, traditional coffee countries, confirms that there are very real opportunities outside the established tea drinking countries.
Tea faces huge competition for share of throat - from coffee, cocoa, soft drinks, water, all the increasingly popular herbal and flavoured infusions, as well as the alcoholic options. In Mexico you can add to this a long list of other non-alcoholic drinks including atole, champurrado, aguas frescas and tejate to name but a few. But in Mexico tea imports for consumption have quadrupled in ten years (rising nearly 10% in 2018) – average consumption has gone up from one cup per head per year to four cups, still a long way behind the 365 cups per head average for the world as mentioned above.
In the tea trade we are all fighting to get higher prices so that everyone working across the trade, especially those working at the production end, will be better remunerated. The increase in production in Africa inevitably resulted in lower prices at Mombasa and Limbe auctions. Prices fell in 2018 with many producers receiving 0.50 US$ to 1 US$ less per kg than they earned in 2017. Falls between 20 – 50%, depending on quality and origin were widespread. In Malawi discussions are ongoing between buyers and producers over the Malawi 2020 programme to develop a formula that will result in better prices and with 2018 seeing lower prices across Africa there is perhaps greater urgency to find a solution.
In India where crop levels remained close to 2017 levels, prices generally held. In Colombo on the other hand where crop levels actually fell slightly, prices were on average consistently lower than they were in 2017.
In China, tea is embedded in your culture and as a result the speciality end is firmly established and so producers are well rewarded. In the west demand for Speciality teas from many origins is growing and for these teas people are willing to pay fair prices to the producers for their skills, the quality of tea and, increasingly, the story.
Price will inevitably be determined by supply and demand and while there are many who advocate reductions in supply in order to raise prices there are equally persuasive arguments for more emphasis to be placed on increasing demand, a debate which needs to be discussed in detail in a separate essay.
This article hopefully gives a brief overview of the World Tea Market in 2018. The views expressed are my own but close analysis of the figures collated by the ITC and published in their Annual Bulletin of Statistics, and updated regularly on their web site, gives subscribers an invaluable insight into trends and opportunities across the world – a vital tool for any serious strategist whether he/she be a producer or marketer or simply an interested consumer of our great beverage!!!
Edward Tufte (an American statistician and professor emeritus of political science, statistics, and computer science at Yale University) once said: “If the statistics are boring, then you've got the wrong numbers.” The statistics in the International Tea Committee’s “Annual Bulletin of Statistics” are never boring!!! Don’t miss out.