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Tea exports breaches US$1 bln value barrier in 2007

Colombo (Sri Lanka), February 28, 2008: Colombo become model tea hub in global market. The Tea Export Trade celebrated a landmark achievement in breaching the elusive US$1 billion value barrier in the year 2007, for the first time in its 140 years history. In the official statistics released recently, the value of tea exports in 2007 is shown to have recorded a 22% increase over the 2006 figure, by advancing from Rs.91.7 billion to Rs.112 billion; an outstanding performance. This performance should be viewed with greater admiration, as it was achieved in the face of the most challenging circumstances. The crippling work stoppage by the plantation labour unions at the beginning of the year, coinciding with a severe drought, significantly impaired production, the ripple effects of which extended over a number of months. The resilience of the plantation sector was manifested in the final crop figures for the year, which declined by only a mere 2%, to 304.6 million kg, in comparison to the 310.8 million kg in 2006. The increase in the value of tea exports is even more laudable, when considering that the volume of tea exports registered an even greater reduction than production of almost 5.5%, from 327.4 million kg to 309.8 million kg while the unit value of each kg of tea exported increased, on average, by 29%.

In the context of this milestone, it is interesting to examine how Sri Lanka’s main competitor, Kenya, fared in 2007. Kenya displaced Sri Lanka as the third largest producer of tea in the world, on account of an all time high crop of 369 million kg against Sri Lanka’s 304.6 million kg from a fraction below Sri Lanka’s 310.8 million kg in 2006. It also displaced Sri Lanka as the largest exporter of tea in the world, with a volume of 345 million kg, as against Sri Lanka’s 309.8 million kg. The respective volumes in 2006 were 313 million kg and 327.4 million kg. However, in export earnings on tea, Kenya recorded US$639 million, declining from US$652 million in the previous year, while Sri Lanka achieved US$1.02 billion, as compared to US$836 million in 2006. This is a tribute to the eminence of the Colombo Tea Auction, the largest single-origin tea auction in the world, reputed for its efficiency, professionalism, transparency and creditability. It is also acknowledged as the tea auction that generates the widest possible competition, realizing optimum prices for the teas sold through it, which are, on average, considerably higher than those of any other tea auction centre in the world.
Source: Daily Mirror, Sri Lanka

 

Malawi tea growers devising plans to overcome low prices

Johannesburg (South Africa), February 28, 2008: Low prices continue to haunt Malawian tea on the auction floors, a bitter irony for some producers as the country is regarded as the pioneer of tea-growing in Africa. The country's current annual tea exports stand at about 43,000 tons, contributing 3% of global tea exports, according to the Tea Association of Malawi (TAML). The Southern Africa country ranks second after Kenya as the largest producer and exporter of tea in Africa. It is also 12th on the global list of tea producing countries.

But despite the country's prominence in the cultivation of this crop, Malawian tea producers complain that the price for Malawian tea is low when compared to its neighbour, Kenya. Auction floor prices at the end of last year (2007) showed that the local produce was selling at 1.44 dollars per kg for the top grades. Kenyan tea, on the other hand, was fetching up to 3.31 dollars per kg at the time. A decrease was noted in the average price of the product during 2007. In 2006, prices averaged 1.22 dollars per kg compared to an average price of 1.02 during 2007. Lack of competition on the tea auction floors in Malawi is the main factor that is crippling the local tea sector, according to Mr. Sangwani Hara, TAML chairperson. He ascribed Kenya's higher prices to the benefits of competition among a range of buyers. Another factor is that, unlike Kenya, Malawi does not have its own tea brand.

Malawian tea is exported to European, Asian and U.S. markets. Kenyan tea, on the other hand, also has big buyers coming from Egypt, Pakistan and Russia on top of the traditional markets that it shares with Malawi. The MCCCI says the tea industry in Malawi has been stagnant for a long period of time even though tea production has been increasing. Malawi's tea production was expected to reach 45 million tons for 2007, of which about 2.5 million tons was sold locally, says Mr. Hara. The problem of low prices has existed for the past few years. But tea growers want to take the bull by the horns and reverse this trend.
Source: AllAfrica.com, Washington

 

Kenya - top dealers now focus on global tea markets

Nairobi (Kenya), February 27, 2008: Tea volumes sold at the weekly auction dropped after major buyers stayed away in anticipation of lower prices in the international market. Although Pakistani interest was held back by last week's elections there, Afghanistan and Karachi bazaar traders did not participate while Egyptian buyers were selective. Market analyst Van Rees reported that supply of tealeaves at the Mombasa market had become more irregular with demand petering out. The analyst expected prices to fall in view of a cautious sentiment in the global market. Poor supply following a dispute over the outcome of the presidential election that hampered leaf picking and transportation could also affect prices at the auction. A decline in output volumes could also arise from delays in the onset of long rains, which weather forecasts have pushed by a month to mid April.

During the last sale best BP1s sold at a weaker $3.10-$2.75 a kg from $3.41-$3.05 at the previous sale while top quality PF1s went out for $2.80-$2.10 a kg compared with $2.90-$2.19 last week. However, the prices are expected to stabilise on the short term because production is expected to fall on factors of drought. Incidents of frost have been reported in several areas around Kericho. Auction volumes in January, 2007 stood at 27.8 million kg compared to 18.5 million kg last month. Last week, auction volumes plunged to the lowest level of 113 604 kg.

Forecasts by Tea Board of Kenya, shows that export volumes are set to decline by 25 million kg this year due to post-election disruptions, dry weather conditions in tea growing areas and the impact of frost in the West of Rift tea growing areas. According to the TBK's January report, average prices at the auction were higher at $2.28 (about Sh140) per kg against $1.79 (Sh110) recorded in January 2007 and $1.77 registered in January 2006. By the close of 2007, Pakistan maintained its position as the leading export destination for Kenyan tea with 23 per cent followed by Egypt, United Kingdom, Afghanistan and Sudan. These key markets took three in every four of Kenya's tea export units while the rest was taken by 46 market destinations world-wide. Afghanistan and Sudan showed substantially increased intake as Kenya regained market losses suffered in 2006 when Kenya tea auction prices had risen considerably due to lower supply caused by the December-February drought. Kenya Tea is valued internationally for blending purposes.
Source: AllAfrica.com, Washington, USA

 
Tea acts as tonic to Sri Lanka stocks war gloom

Colombo (Sri Lanka), February 26, 2008: High international tea prices are boosting interest in Sri Lanka's tea and rubber plantation sector shares, which have helped reverse the stock market's 7% drop in January, when the government formally cancelled a truce with the separatist rebel Tamil Tigers. With investors betting on strong quarterly results for the sector, Colombo's leading All-Share index has clawed back its losses this year and analysts say tea plantation share gains could help drive the broader market back into positive territory. The market dipped 0.26% on 26th February, and is down around 0.5% so far in 2008. But for the year to date, the plantation sector sub-index is up more than 21%. Mr. Vajira Premawardhana, Head of research at Lanka Orix Securities has stated that because of high expectations of strong earnings in plantation shares, small investors are highly attracted. Sri Lanka's Tea Board said last month that despite a 2% drop in 2007 production, the country earned a record $1 billion from tea exports, helped by high global prices. Tea is a major foreign exchange earner along with remittances and garments.

The Tea Board said average tea prices at auction in Colombo rose more than 40% last year to $2.74 per kilogram. Sri Lanka was the world's No.3 tea producer after China and India in 2006, but the leading exporter, according to Tea Board data. Three plantation companies, which have announced quarterly earnings this month, have reported strong profits, fuelling interest in other plantation shares. The sector has accounted for nearly half of all bourse turnover for a week. Kotagala Plantation posted a 57% jump in 9-month net profit, Talawakelle Tea Estates said its 2007 net profit grew 24%, and Kelani Valley Plantation increased its 2007 net profit by 62%. Fifteen more plantation sector shares are set to release their earnings by the end of the month.  Plantation shares are minnows in terms of market capitalisation but, unaffected by a new phase in a 25-year civil war, they have shone compared to blue chip stocks such as top mobile operator Dialog Telekom.
Source: Reuters

 
2nd Global Dubai Tea Forum

The second Global Dubai tea forum held from 19th to 20th February 2008 at Hyatt Regency, Dubai. Dubai Tea Trading Center has conducted the event with the support of IBC. The forum was aimed at addressing the new developments and key issues in the tea industry, sharing industry-specific knowledge and best practices for improving tea production and marketing worldwide. In addition, the forum acts as a platform for the people from different markets to interact more and thereby increasing the chance for flourishing their business.

The technical side of the forum focused on supply – demand, consumption patterns of tea, prospects for tea futures market, tea scenario in major producing and consuming countries. The forum also covered the value addition aspects such as flavored teas and packaging. ‘Darjeeling tea tasting’ and ‘The Golden Tea Leaf Indian Awards’ has enlightened the event.

The event started with introductory welcome speech of Mr. Sanjay Sethi, Head, Dubai Tea Trading Centre followed by Mr. Farid Mohammed Ahmed, Secretary General, Dubai World, who has given his views on driving regional growth through innovative projects. He also mentioned that though Dubai has excess of oil/energy, its contribution to GDP is only 3% and the GDP rose about 263% between 1990-2003. Mr. Ahmed Bin Sulaymen, Executive Chairman, Dubai Multi Commodities Centre (DMCC), has given speech about the developments in DMCC and its role as a commodities specific hub.

The next session was so interesting which focused on the current supply-demand position and price movements of tea for the next 10 years. Mr. Kaison Chang, Senior Economist Commodities, Food and Agriculture Organisation of the United Nations (FAO), explained the imbalance of production & supply in current and future trends. He foresees that by 2017 tea production would touch 1571 thousand tons against 968 thousand tons in 2006 whereas Indian production growth will be at 2.2%, Kenyan and Sri Lankan tea production are expected at 1% only. Meanwhile, world exports would touch 1385 thousand tons in 2017 against 1151 thousand tons in 2006 and green tea exports are estimated to grow at 3.5% annually.

Mr. Manuja Peiris, Chief Executive, International Tea Committee briefed on World Tea consumption patterns, trends and noticeable changes. He viewed that there is a lack of growth in tea consumption in Germany and Italy while CIS countries are absorbing 48% of imports. Mr. David Rutledge, CEO, DMCC focused on the prospects for a Tea Futures market. He had a view that the main hurdle for introducing futures in tea is the vast varieties of tea. However, he opined that DMCC could introduce tea futures soon. Mr. Heneage Mitchell, Managing Editor, Tea & Coffee Asia, Thailand has presented his views on coffee market in comparison to tea industry perspective. In the price front, all the speakers were bullish on tea and were expecting the prices will continue its bull run.

The major tea producing countries India, Kenya and Sri Lanka has occupied the afternoon session. Indian Tea Board Chairman Mr. Basudeb Banerjee has presented the India Tea scenario and branding efforts. Ms. Sicily K. Kariuki, Managing Director of Kenya Tea Board has discussed about the Kenya Tea industry marketing efforts, development of small tea growers. While Sri Lankan Tea Board Director General Mr. H.D. Hemaratne had a talk on the production trends, international marketing & branding of the Sri Lankan Tea Industry. Overall, the Tea Board officials have given a clear picture about their Industry.

The Tea Board session was followed by an interactive panel discussion, where representatives from major producing countries like India, Kenya, Sri Lanka, Indonesia, and Vietnam have participated. They had a clear and wide discussion on the current scenario in tea industry and what would happen in the future also. In the meantime they also answered the queries raised by the audience of their own industry.

Tea Board of India has also conducted Darjeeling tea tasting session with a view to promote its premium brand. A range of Darjeeling teas, including the speciality oolong, white and green teas, were tasted by a cross-section of delegates.

In the second day, the technical session has focused more on the value addition and the marketing front of tea. Mr. William Gorman, Executive Director, UK Tea Council has given an interest speech on Market builder or Marketing butterflies that attracted the attention of more audience. Mr. Hamid Raji, President and Director General, MFC, Morocco discussed on the topic of Tea Market in North & West Africa has also attracted more business people who considered these markets as a new venture for their business. Mr. Ramaz O. Chanturiya, General Director, Rusteacoffee, Russia has given a very clear depiction of the Russian Tea Market.

The final session had a focus on packaging and flavoured teas. Mr. Martin Rapp, Managing Director, and Vice President, Glatfelter Composite Fibres Business Unit, Germany had given a speech, which focused on the Tea Bag trends and developments in the filter paper industry. He well explained the tea packaging right from usual packing to recent tea bags and its importance in tea marketing. He also explained value and importance of the packaging for marketing and about various types of tea bags. Mr. Franco Menetti, Head, Technical Marketing, IMA, Italy has briefed about the Tea machines, new technology/developments, IMA perspective. Mr. Akin Palazoglu, General Manager, Martin Bauer, Turkey has delivered the last speech of the event on the Developing trends of flavored teas.

As part of showcasing the varieties of Indian tea, especially from South India, the fourth Golden Leaf India Awards: Southern Tea Competition was held on the sidelines of Forum. The 62 shortlised teas that qualified for the first and second level of screening were evaluated by a panel of internationally renowned tasters. Ms. Liubov Bahareva, Ormi Russia, Mr. Yakya Beyad, Britania Tea UK, Mr. Kurush Bharucha, Unilever UAE, Mr. Richard Smyth, Finlays UAE and Mr. Mohsin Saify, Tapal Tea Pakistan were the panel members.

Ms. Priya Kumar, Director of Tea promotion, Tea Board of India has announced the result. Kannan Devan Hills Plantations Company has bagged awards in four categories. While, Harrisons Malayalam, United Nilgiri Tea Estates and Devon Plantations and Industries won three awards each, Puthutotam Estates (1943) Ltd, Kolukumalai Tea Estate, Riverside Tea Plantations and Pullikanam Estate two awards each, Karibetta Estate Syndicate, Parkside Estate, Anaimudi Tea Factory, Vigneshwar Estate Tea factory, Rousdonmullai tea estates Pvt Ltd, Ripon Estate and Arnakal Estate bagged one award each. The award, a joint initiative of UPASI and Tea Board of India, was a great success and would do good for the entire South Indian teas from various regions.

2nd Global Dubai Tea Forum has ended with a great success and the delegates said bid adieu to the current forum with the promise of meeting in the 3rd Global Dubai Tea Forum, which is likely to be held on February 2010.
Source: Foretell Business Solutions Pvt. Ltd.
Kenya tea sales down on violence, output seen down

Nairobi (Kenya), February 18, 2008: Kenya's weekly tea auction volumes dropped 33% to 18.5 million kg in January after violence hampered leaf picking and transportation, and bad weather could cut output in the year. According to the Tea Board of Kenya (TBK), the volume offered in 2008 declined largely due to the post-election disruptions and the effects of the current dry weather conditions in the tea growing areas and the frost effects in the West of Rift tea growing areas. The weather forecast for the next month indicates that the long rains expected in mid-March might actually be received in mid-April. Ms.Sicily Kariuki, Managing Director of TBK has stated that the auction volumes in January 2007 stood at 27.8 million kg. Associations grouping both estates and smallholder sectors had reported that plucking, collection; processing and packaging were back to normal after weeks of violence following a disputed poll hurt operations. However, low rain over farms west of the Rift Valley was affecting production while frost conditions had also hit plantations in Nandi district and damaged 30% of tea yields in some cases. Farms in west of the Rift had reduced tea-plucking days to three each week due to a low green leaf yield. The amount and duration of the long rains has also been forecasted as lower than normal, therefore the expected high yields of April to May are unlikely to be attained.
Source: Reuters

Tea prices set to soar

Nairobi (Kenya), February 18, 2008: The United Nations’ Food and Agriculture Organization (FAO) has forecasted that the tea prices are likely to jump to an all-time high this year, underpinned by production disruptions in Kenya. In the latest sign of rising global food inflation, wholesale tea prices surged last year to an annual average of $1.95 a kilogram, a 6.5% increase from the previous year and the highest annual level since 2002. Average tea prices are expected to reach even higher and possibly record levels in 2008 following a 10% reduction in shipments from Kenya, the FAO has forecast in a report to the Global Dubai Tea Forum. Prices in Kenya, the world’s largest exporter of black tea, have already jumped further to about $2.50 a kilogram amid civil unrest since the disputed re-election of Mwai Kibaki, President, in December. Kenya’s tea-rich region of the Rift Valley has been particularly hit by civil unrest and prices at the weekly auctions in the port city of Mombasa have risen sharply. Mr. Kaison Chang, a tea specialist at the FAO in Rome has also stated that the recent prices in Mombasa of $2.50 a kilogram were a record for Kenya’s black tea. Prices were lower at the auctions in Sri Lanka, the second- largest exporter, and at sales in other locations, including India and China. However, the global tea market’s supply and demand balance has been improving overall thanks to strong consumption growth in China, where demand is rising at 13% annually, and the Middle East and North Africa. FAO has reported that the review of the world tea market indicates an improvement in the fundamental oversupply situation. World consumption in 2006, the latest data available, hit 3.64m kg, above production of about 3.6m kg.
Source: Financial Times, UK 

Industry Experts Highlight Growth Outlook at 2nd Global Dubai Tea Forum 2008

Dubai (UAE), February 19, 2008:  Leading international industry experts gathered at the 2nd Global Dubai Tea Forum, where they highlighted the growth outlook for the tea industry. During the first day of the biennial two-day forum, high-profile speakers focused on identifying consumer trends in order to further bridge the supply-demand gap in this truly global industry. They also considered the benefits of a full-fledged tea futures market to the trade. Delivering the keynote address, Mr. Farid Mohammed Ahmed, Secretary General, Dubai World, underlined Dubai’s geographical and infrastructural advantages for the global tea trade. He pointed out that the emirate is located at a strategic crossroads between East and West, and has long served as a gateway for the trade. Trade through the emirate represented 80% of the UAE’s US$233 billion foreign trade in 2006. Tea trade transacted through the Dubai Tea Trading Centre (DTTC) has witnessed year on year growth recording 5.2 million kilos in 2007, up from 4.3 million kilos in 2006, according to Mr. Ahmed bin Sulayem, Executive Chairman of Dubai Multi Commodities Centre (DMCC). Total tea imports into Dubai touched 96.6 million kilos in 2007. Mr. Kaison Chang, Senior Economist, Commodities, Food and Agriculture Organization of the United Nations has stated that the world tea production reached an estimated 3600 million kilos at the end of 2006, with markets such as Kenya, India and Sri Lanka driving this robust growth and the tea production is expected to maintain healthy growth levels over the next four years and surpass the 4000 million kilo mark in 2010. According to figures presented by Kaison, demand for tea has risen significantly around the world, with India and China alone recording 42% of market share in global tea consumption. It was also noted that China’s consumption has doubled in the past 10 years.

The first day of the Global Dubai Tea Forum also featured insights into tea consumption trends in Africa, Europe and America as presented by Manuja Peiris, Chief Executive, International Tea Committee, UK. He elaborated on various economic and social factors, such as food price inflation and worker welfare, which will have a bearing on the global tea trade and consumption patterns. Dr. David Rutledge, Chief Executive Officer, DMCC, provided a special presentation on the commercial benefits of the development of a tea futures market. By locking in forward prices for at least two years, market participants are able to benefit from increased cash-flow predictability as well as improved increase to finance. He also added that a tea futures market is an adjunct to the physical market and not a substitute for it. While outlining the significant scope to further grow the global tea industry, other experts at the forum emphasized that successful coffee marketing techniques could be applied to the tea industry. Speakers called for tea exporting markets to capitalize on tea positioning as a lifestyle beverage of choice in order to reinvigorate tea sales and consumption in new markets. Further presentations on the first day of the Global Dubai Tea Forum focused on topics related to marketing and branding initiatives for the tea industry, showing case studies of efforts taken by tea producing countries such as India, Sri Lanka and Kenya.
Source: Middle East Events (press release), Dubai

Dubai wants to launch world's first tea futures contract

Dubai (UAE), February 20, 2008: Dubai wants to launch the world's first tea futures contract if it finds favourable response among major tea producers and other key industry participants. They argued that international tea trade would benefit from a well-functioning futures market as it would provide a good pricing guidance for the commodity. Mr. David Rutledge, Chief Executive Officer of Dubai Multi Commodities Centre has stated that if there is a possibility of a successful tea futures contract, then Dubai might be the place for it since we are ideally positioned between the tea producing and major consuming countries. However, experts said it would not be easy to create a benchmark for a tea futures contract because of the wide variety grown in various countries. Mr. H.D. Hemaratne, Director General of Sri Lanka Tea Board has stated that they have 24 different types of tea in Sri Lanka. So if we want to have a futures contract, how do create a standard. He added that a forward contracts system in Sri Lanka has not been successful because of a lack of participation from key industry players. He also added the brokers and producers would not participate in a futures market if there is a trend of rising prices, and buyers would not enter the market if there is a price declining trend.

Mr. Rutledge himself acknowledged that establishing a description of tea that can be used as a benchmark would be difficult. He said other teas could be delivered at specified premiums and discounts around that agreed standard description. There has been no tea futures contract developed till date because of a lack of initiative linking Indian Ocean producers and other tea growing countries. New York has thought about such a contract but Dubai believes it is better placed to start a tea futures market because its strategic geographical location. He also added that if someone is going to do it, [then it should] better be in this part of the world. Mr. Sanjay Sethi, Director of Dubai Tea Trading Centre, said discussions would be held with tea industry leaders to see if the idea can be implemented. He also wanted feedback whether it is something that is acceptable to the industry. If it is the need of the market then they want to be the first to do it.
Source: GulfNews, United Arab Emirates 

Darjeeling tea tasting party in Dubai

Dubai (United Arab Emirates), February 21, 2008:  The Indian tea industry held a high-profile tea tasting party to promote its premium Darjeeling brand in Dubai. The tea tasting session took place during the 2nd Global Dubai Tea Forum, organized by Dubai Tea Trading Centre (DTTC), an initiative of Dubai Multi Commodities Centre (DMCC). A broad range of representatives from tea producing and consuming nations participated in the forum, which ended on 21st February. A range of Darjeeling teas, including the speciality oolong, white and green teas, were tasted by a cross-section of delegates. The event was attended by Mr. Basudeb Banerjee, Chairman, Tea Board of India along with other officials. Darjeeling teas, grown in the foothills of the Himalayas, are one of the world's most exclusive teas, prized for their exquisite aroma and flavour. Only 10 million kilos of Darjeeling tea are produced annually from 87 certified gardens. As part of showcasing the varieties of Indian tea, especially from South India, the fourth Golden Leaf India Awards: Southern Tea Competition (TGLIA-STC) was held on the sidelines of the Global Dubai Tea Forum 2008.
Source: Economic times

Quality standards to help check tea glut

Dubai (United Arab Emirates), February 21, 2008: India’s tea production has gone up, and so has its consumption in the country. However China still beats India in tea consumption. Yet, India can take advantage of its increase in tea output and bridge the gap as a result of lower production in Kenya, which is affected by political problems. According to the Food and Agricultural Organization (FAO), minimum quality standards and improved strategies would help countries like India, Vietnam, etc which have overproduction. In its report for the biennial Global Dubai Tea Forum, FAO states that the world tea prices are expected to maintain their upward trend in 2008, as a result of a tight supply in the world market aggravated by a projected 10% decrease in Kenyan production due to civil unrest. Also, the FAO Composite Price, as a world indicator price for tea, increased by 11.6% to $1.83 per kg in 2006. The market fundamentals for 2007 suggest that the trend is likely to continue.

The FAO states that world tea production grew by more than 3% to reach an estimated 3.6 million tons in 2006. The expansion was due to a record crop increase of 9.5% in China with 1.1 million tons. India, the second largest producer, recorded a 3% increase in harvest, totalling 9.5 lakh tons for 2006. The annual tea consumption growth in India was 2.5% against the annual trend of 1.6% on average over the previous decade. Also, the Chinese tea consumption increased by a spectacular 13.6%. The FAO feels that India, China and Vietnam, which have increased production, can fill the gap in the world market resulting from decrease of Kenyan tea production. The world black tea production will grow at 1.9% annually to reach 3.1 million tons for the next 10 years, predicts FAO. However in terms of consumption, black tea is projected to reach 2.8 million tons, pointing to an oversupply of about 300,000 tons.
Source: Economic times

Kenya tea prices mixed as quantity goes up
Nairobi (Kenya), February 13, 2008: Kenya tea prices were mixed at this week’s auction, with most grades holding steady or easing slightly in trade characterised by higher demand from major buyers. Mombasa-based Africa Tea Brokers (ATB) said 108,184 packages were offered for sale, with 19,209 left unsold. At last week’s sale 102,168 packages were offered, with 9,850 packages unsold. Better demand prevailed with strong demand coming from Egypt Packers, Pakistan Packers, Sudan, Yemen and other Middle Eastern countries. Best BP1s sold at $3.60-$3.15 per kg, compared with $3.79-$3.15 per at last week’s sale. Best PF1s sold at $2.90-$2.38 per kg compared with $3.17-$2.36 last week. Other markets that bought more tea than last week were United Kingdom and the Pakistan Bazaar, while Afghanistan and the Egyptian government sector bought less than last week.
Source: Daily Nation, Kenya
Africa Tea Says Most Prices Gain for Eighth Consecutive Sale
Mombassa (Kenya), February 13, 2008: Africa Tea Brokers Ltd., which runs the world's biggest tea auction in the Kenyan port city of Mombasa, reported that prices of most grades rose for the eighth consecutive sale amid political unrest. Prices for 16 grades advanced while eight fell at the sale held on February 11 and February 12, Mombasa-based Africa Tea reported. Africa Tea will give further details of the auction later this week. African tea prices last week climbed to the highest in more than two years, trading at an average $2.46 a kilogram (2.2 pounds) because of disruptions caused by violence after disputed presidential elections in Kenya on December 27, 2007. Kenya is the world's biggest exporter of black tea.
Source: Bloomberg
Kenyan farmers could earn more for tea as production falls
Nairobi (Kenya), February 7, 2008 : Tea output is expected to decline this year, signaling a slowdown in recovery of the sector that has been affected by political turmoil. Industry players say though post-election violence has affected productivity in key tea growing areas in the south of the Rift Valley, farmers could earn more from higher prices in a market with limited supply. Tea Board of Kenya says output is expected to drop by 10% to 335 million kg compared to 369 million kg realised last year. Exports will also decline to about 320 million kg, down from 345 million kg recorded last year, according to Tea Board of Kenya. Last month, Unilever Tea Company - the top tea producer that manages 8,000 hectares of tea plantations said it had lost nearly a third of its workforce to forced evictions that followed the disputed outcome of December's presidential poll. Hundreds of hectares of tea plantations were also destroyed in ensuring riots. Mr. Francis Kaptich, the corporate affairs director for Unilever stated that about 20 % of their workers were affected and are currently not working and all the tea factories and estates are processing close to 500,000 kgs of green tea leaves per day. James Finlay, Kenya's second largest tea grower reported that it had temporarily replaced workers who left because of political unrest. The company whose employment policy demands that it employees 75 % of the workforce from the locality has been the least affected by the post poll turmoil. However, Mr. Nec Davies, Managing Director acknowledged that his company has been bogged down by the paralysis of the transport system with only limited amounts of processed tea reaching Mombasa's weekly auction market. Sasini Tea, which owns estates in Sotik and Nyamira districts, said its operations had been slightly affected by the disturbances. Last December, most listed agri-based companies reported increased annual earnings but the post election violence has since taken a toll on their performance. Unilever, for instance traded at high of Sh67 per share in mid December but this has dropped to Sh50 by close of trading yesterday. Sasini had on the other hand lost Sh2.50 to settle at Sh14.25. Analysts said the two stocks are not expected to dip below Sh65.36 and Sh19.05. Higher production in 2007 was attributed to good weather conditions characterized by well distributed rainfall in the tea growing regions. Last year, plantations, which are predominant in western Kenya, recorded a production increase of 17 % to 139 million kg. Small-scale growers recorded a production increase of 20 % to peak at 229 million kg and accounted for 62 % of total production. In 2007, the average unit price for Kenyan tea fell from $2.03 per kg recorded in 2006 to $1.76. But earnings for the year ended declined by nine per cent from Sh47 billion recorded in 2006 to Sh43 billion in 2007. The drop in total earnings is largely attributed to the strengthening of the shilling against the US dollar and increased tea supply for most of the year ended.
Source: AllAfrica.com, Washington
Sri Lanka eyes record '08 tea crop up to 320 mln kg
Colombo (Sri Lanka), February 7, 2008 : Sri Lanka forecast on 7th February that its 2008 tea crop could hit a record high of up to 320 million kg and vowed to build on export revenue from the crop, which exceeded $1 billion for the first time last year, according to Mr. Lalith Hettiarachchi, chairman of the Sri Lanka Tea Board. Tea output fell 2% to 304.6 million kg last year from 310.8 million kg in 2006, with officials citing inadequate fertiliser use due to high prices, unfavourabl weather and the fallout from a strike. Sri Lanka's record 2005 harvest of 317.2 million kg made it the world's fourth-biggest producer behind China, India and Kenya and second only in exports to Kenya in that year. Its tea export revenue surpassed $1 billion in 2007 despite the fall in output, thanks to a rise in global tea prices, and the island's industry aims to double exports of value-added tea products like instant tea over the next five years. Sri Lanka exported 309.8 million kg of tea last year, including re-exporation of 15.6 million kg that tea companies imported from abroad to meet client orders. Bulk tea accounted for nearly 60 % of exports.
Source: Source: Reuters
Pakistanis witnessed another hike in tea prices
Karachi (Pakistan), February 6, 2008 : Tea prices have gone up in local market forcing the local consumers to face a new wave of inflation. Within a span of one month the price has gone up twice. According to a market survey of Jodia bazaar, at present Danidar grade-one tea is being priced at Rs.270/kg, which was being previously charged at Rs.240/kg, while the loose tea prices surged by Rs.25 to Rs.30/kg in local market. Tea is imported commodity and almost 85 % of local consumption is been imported from Kenya. Hence the recent political mayhem in Kenya has badly affected the tea exports due to which the demand of tea in the tea-imported countries has increased. This situation has also affected the country and tea prices have gone up in the local market. Due to prolonged winter season the consumption of tea has increased therefore the importers are running short of their stocks, as they are unable to import the tea. Pakistan is the second largest tea importer after Russia with consumption of 170 million kg a year, imports about 100 million kg annually, while rest of the 70 million is brought into the country through smuggling. According to the industry sources, the government is annually losing Rs.152 million in revenue due to tea smuggling through Afghanistan. Country fulfils its tea requirements mainly importing from Kenya followed by India, Indonesia, Bangladesh, Rwanda and Tanzania. Industry sources also predict that if the current political crisis in Kenya remained then a constant rise in prices are expected as majority of tea factories in Kenya are non functional.
Source: Daily Times, Pakistan
Iran snuffs out teahouses over water pipes
Tehran (Iran), November 4, 2007 : Iran has shut down several traditional teahouses popular with Iranians and foreign tourists alike in historic cities because they offer water pipes. The reformist Etemad Melli newspaper reported that five famous teahouses had been shut down in the historic cities of Isfahan and Shiraz, the most popular urban destinations for foreign tourists in Iran. The newspaper reported that the closures were in line with a government drive to discourage all kinds of smoking, which has prompted local authorities to shut down teahouses that offer water pipes alongside food. Eateries, tea houses and restaurants are not allowed to provide tobacco even in the traditional form, according to Mr. Mohammad Ali Najafi, a police commander tasked with monitoring public places. The report further stated that the teahouses in the tourist sites of Chehel Sotoun palace and Manar Jonban in the historic imperial city of Isfahan had been shut down for restoration and conversion.
Source: AFP, Iran
Notable trade imbalance with China discussed
Colombo (Sri Lanka), November 4, 2007: Prof. G L Peiris, Minister of Export development and International Trade, had bilateral discussions with Mr. Yi Xiaozhun, Vice Minister of Commerce of China, in Goa on the sidelines of the Second Ministerial Meeting under the Asia-Pacific Trade Agreement (APTA) in Goa. The Ministers discussed the trade relationship between Sri Lanka and China and noted the significant trade imbalance in China's favor. The Chinese Minister of Commerce indicated that his government would intend its fullest co-operation for the implementation of measures to reduce the existing imbalance. A particular focus in the talks was on the export of Sri Lankan tea to china and practical steps to expand trade in this field.
Source: Daily Mirror, Sri Lanka
Turkey's first green tea factory to open
Ankara (Turkey), November 4, 2007: The construction of Turkey's first private organic green tea processing factory has begun at the Beşikduzu Industrial Zone in Trabzon on the Black Sea coast. The factory, which is a product of a collaborative effort by Mr. Zuhal Akyuzlu, President of Chamber of Commerce and Industry and three other partners is expected to cost YTL 800,000 and will start production in 2008. Green tea under Troya brand will be exported all around the world, particularly to China and Japan.
Source: Turkish Daily News, Turkey
NTRI succeeds in green tea cultivation
Peshawar (Pakistan), November 4, 2007: The National Tea Research Institute (NTRI) has established green tea processing plant besides black tea plant, which was giving positive results on commercial basis in Shinkiari this year, according to NTRI Director Mr. Bakhtmand Khan. He stated that NTRI has successfully cultivated tea plants in Shinkiari area for the last six years and this year they have experimented with the green tea processing plant and the results were positive. With the financial support of the Pakistan Science Foundation, green tea processing plant has been installed in the National Tea Research Institute. He viewed that like the locally produced black tea the quality and taste of the locally processed green tea is also very good. Moreover, he added, 2,700 kg of black tea and 1,300 kg of green tea have been produced this year. Mr. Khan stated that if adequate funds were provided the production of green and black tea can be enhanced and Pakistan is also added to the list of black and green tea producing countries.
Source: The News - International, Pakistan
Tea market anticipated to have nearly doubled in America by 2012
Maryland (USA), November 4, 2007: Packaged Facts, an organization that publishes market intelligence on a wide array of consumer industries, stated that it expects the American market for all kinds and sorts of tea beverages to grow dramatically over the next five years, from $7.4 billion in sales this year to almost $15 billion by 2012. The ever-increasing American interest in wellness and holistic health, especially among relatively older Americans who are constantly seeking age-reduction foods and substances (of which tea is one), is fueling tea's rapid rise in popularity. By 2012, specialty tea, which at present makes up 36% of the overall market for the beverage, shall be in command of half of all tea and ready-to-drink tea sales in the United States.
Traditionally conceived of by Americans as the British caffeine-fix of choice, tea has been growing in popularity in the United States, slowly but steadily overtaking some of the coffee market as Americans becomes increasingly aware, in general, of the need for less stress and a little more relaxation in their lives. Tea does not contain as much caffeine per ounce as coffee, so once one becomes more used to drinking tea than coffee as one's choice of perk-up beverage, one can get that spike of energy without having to worry as much about the jitters.
Source: Associated Content, CO
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