Meeting on Sustainability of the Global Tea Sector

way2barak, June 19: A meeting of stakeholders representing leading Tea Producers’ Associations from Asia and Africa was held at Taj Dubai, Business Bay to discuss the Sustainable Development Goals of the global tea sector with primary focus on addressing quality, restoration of the demand-supply equilibrium and the long-term sustainability of the tea sector.

The meeting was chaired by Mr. Hemant Bangur, Chairman, Indian Tea Association & Consultative Committee of Plantations’ Association (CCPA) and was attended by Mr. Arijit Raha, Secretary General, Indian Tea Association; Mr. Mayank Beriwala, Chief Executive to Chairman, Dhunseri Tea & Industries Ltd., Mr. Arthur.D. Sewe, Chairman, East African Tea Trade Association; Mr. Adi Hussein, Vice Chairman, East African Tea Trade Association; Mr. George Omuga, Managing Director, East African Tea Trade Association, Mr. Robert Koech, Director, Independent Tea Producers Association of Kenya (ITPAK) Mr. Sangwani J Hara, Chairman, Malawi Tea Association and Ms Rukia Muwango, Manager for Planning, Promotion and Evaluation, Tea Board of Tanzania.

Mr. Hemant Bangur, Chairman, Indian Tea Association stated that the global tea industry is facing a demand and supply mismatch as production continues to outpace demand with the traditional tea consuming nations of Europe & Asia seeing stagnating demand.

Mr. Bangur highlighted that the last two centuries have seen consumption penetrating across all income groups. However, one crucial and significant population group still remains unpenetrated. Africa with its growing population and rising income provides a favourable ground for introduction of World’s healthiest beverage with a potential to become one of the largest markets of Black tea.
He further added that tea consumption is more a cultural phenomenon than a physical need. Hence, the habit of consumption of tea must be inculcated from a younger age as an aspirational drink amongst the African youth. He suggested that the African adolescent and youth can potentially be targeted by offering this healthy,
stimulating beverage as the centre piece of social interaction similar to South Asia & China.

Mr. Arthur Sewe, the Chairman of East Africa Tea Trade Association (EATTA) noted that the tea sector in East Africa is currently facing decline in tea quality and high production volumes that requires concerted efforts towards addressing issues related to climate change and farmers concerns.

The meeting majorly deliberated on the following issues :

 The increasing impact of climate change, Price stagnation, high labour and input costs, mismatch between demand and supply leading to oversupply, high transaction costs and fair price discovery challenges are adversely affecting the economic viability of the global tea sector and making it difficult to achieve the Sustainable Development Goals (SDGs).

 The tea industry is facing a crisis with regard to exports and declining value of produce thereby threatening the livelihoods of millions.

 Cost reductions have led to lower quality, which decreases consumer demand and perpetuates a negative cycle of oversupply and the industry needs to start focusing on both improving quality to boost demand and restoring the supply-demand balance to stabilize prices.

 Africa should consider sustaining quality drive by reducing pruning cycles, increasing tea consumption and regulating new tea plantations.

 Global oversupply is a phenomenon which is creating mismatch in the Demand-Supply equilibrium and adversely impacting prices. Tea Prices across all Black Tea auction centres have been stagnating over the last few years.

 Due to large scale expansion of tea growing areas in the last decade, global tea production has increased from 5228 mkgs in 2014 to 6603 mkgs in 2023 – an increase by 26.30%. Consumption levels have not kept pace with the growth in production and there was an apparent oversupply of 391 mkgs in 2023 as per ITC Bulletin.

 Concerted efforts and strategies to correct the mismatch between production and consumption and demand should be implemented by tea producing
countries as a price stabilization mechanism for the sustainability of the tea sector.

 Economic recession and geopolitical challenges in the traditional bulk tea export markets has been a major factor in tea prices volatility. Tea prices and trade have been adversely impacted by the Russia- Ukraine conflict, as the Russian Federation was the largest importer of Indian tea, the third largest importer of Sri Lankan tea and the fifth largest importer of Kenyan tea.

 Conflicts in the Red Sea and the Gulf of Aden has exuberated tea buying and export challenges due to increase logistics costs and shipping disruption thereby diminishing the producers returns hence affecting millions of smallholder tea farmers households.

 Adoption of climate resilient adaptation strategies in the tea producing countries to mitigate the negative impacts of climate change in the tea sector is crucial for long term viability of the tea sector.

 Mr. Arthur Sewe, the Chairman of East Africa Tea Trade Association (EATTA) stated –

“The increasing impact of climate change is partly to blame for the declining tea quality as it is adversely affecting the tea sector globally,”

 Mr. Sangwani Hara, Chairman of the Malawi Tea Association (MTA) stated –

“Climate change is a big problem that must be addressed intruder to sustain the level of tea productivity,”