India has emerged as the largest exporter of tea to China — the world’s biggest tea producer — in 2019, overtaking Sri Lanka, riding on the rising demand for Indian varieties of black tea among Chinese millennials in the mostly green tea-producing country.
Indian tea export to China has trebled in the last five years, with 12 million kg (mkg) sold to that country between January and November 2019, up from the 3.6mkg of 2014. Sri Lanka, the second-largest importer of tea to China, imported 9mkg in the same period.
China, from where the British had sourced tea bushes to start plantations in the country centuries ago, is now the fourth-largest export market of Indian tea.
India and China have both been vying for the lion’s share of the global tea market. Industry insiders believe that stricter non-tariff barriers, quarantine parameters and differences in lab-testing methods for pesticide and fertilizer residue have posed big hurdles for growth in exports to China.
At a time Chinese products are flooding the country, tea’s ‘reverse trend’ has enthused the Indian market. “Owing to a big surge in demand in the younger generation, China has been sourcing more black tea, mainly from India and Sri Lanka,” said Indian Tea Association secretary Sujit Patra, who has been looking after tea export promotion on behalf of ITA. “But the price realisation has gone down around 10% year-on-year amid a low-rate market, although we are exporting a more quantity of tea.”
In 2019, Indian exporters fetched an average of $2.31 per kilo of leaves in China, compared with $3.6 per kilo grossed in 2014. “Once non-tariff barriers (NTB) are addressed, Indian tea exports to China could attain exponential growth,” Patra added.
“Darjeeling tea is more of a passion or fashion statement for Chinese youth,” said Zha Liyou, consul general of the People’s Republic of China in Kolkata, proffering a reason for Indian tea’s popularity in China. “But, apart from Darjeeling, tea varieties of Assam and Nilgiri are also gaining ground in our country. This is happening despite a huge cultural difference between India and China with respect to drinking tea.”
Last year, ITA had tied up with the China Tea Marketing Association (CTMA) for trade boost, knowledge-sharing and promotion. In September 2019, Indian tea producers and exporters took part in a global contest in China, where Goodricke Group and James Warren Tea bagged the ‘best’ and ‘most robust’ quality awards, among 850 samples from a number of countries.
“India needs to launch a sustained, concerted promotion and make the Chinese familiar with the taste and profile of our speciality teas. China presents a great opportunity for us,” said Anshuman Kanoria, chairman, Indian Tea Exporters’ Association (ITEA).
“Basically, Chinese youth like ready-to-drink (RTD) milk tea from vending machines, both hot and cold,” said Azam Monem, wholetime director of plantation major McLeod Russel. “The raw material required is black tea. But China doesn’t have proper facilities for black tea. On the other hand, green tea is very expensive.”
Kanoria corroborated Monem’s view. “There is an increase in demand for milk RTD tea in China, for which thick Assam CTC teas are best suited. That’s why Assam tea has made inroads in China,” he said.
Annually, India’s northern neighbour produces 2,700mkg tea (15% of it black tea), consumes 1,800mkg and ships around 400mkg leaves across the globe, according to latest data. India harvests around 1350mkg-1400mkg tea per year, and the country’s tea exports crossed 250mkg. “But China has a greater scope of pushing their huge amount of surplus tea into the global market. However, it is yet to enter India properly as there is a 100% duty levied on tea import,” said Patra.
ITA pins hopes on the increasing annual tea exports to China substantially in the next couple of years. “We have already visited China a couple of times since 2018. More such visits are under consideration for 2020,” said ITA chairman Vivek Goenka.
Source: Times of India