New Delhi, May 14 (UNI) Just like for other tropical products, the world tea market has seen a tendency for increasing supplies to run ahead of demand growth, depressing prices and returns to producers in developing countries.
As different attempts to control supplies over the years proved ineffective, tea market experts have switched their attention to demand and especially how to boost demand in producing countries where per capita tea consumption is low, according to an FAO Report prepared for the Intergovernmental Group on Tea meeting in Hangzhou, China, which began today.
World tea production continued to grow in 2006. The annual growth rate was more than 3 per cent to reach an estimated 3.6 million tonnes. The expansion was mainly due to record crops in China, Viet Nam and India.
The very latest figures put world black tea production at 2.5 million tonnes as compared to 968,000 tonnes for green tea. FAO projections to 2017 indicate that world green tea production is expected to grow at a considerably faster rate than black tea, 4.5 per cent annually compared to 1.9 per cent for black tea. The projections reflect the growth in China where the programme for production expansion through rehabilitation, replanting and some conversion is expected to continue to 2017.
The level of world tea consumption in 2006 was roughly equal to production. But its growth rate was only one percent, a slowdown from the annual average of 2.7 per cent growth over the previous decade.
Per capita consumption in the major tea producing countries lags behind, in spite of their strong economic growth. Russians consume 1.26 kg per year and the British 2.2 kg per year but in India tea consumption is only 0.65 kg per head per year and in China it is only 0.53 kg per year.
The report sees an immediate potential for expanding consumption in producing countries with strong economic growth and low per capita consumption of tea and looks at how this might be achieved through quality improvement.
''Expanding consumption in producing countries could ease supply pressure at the world level and improve tea prices in the long run,'' the report said.
There is a growing international interest in the enforcement of minimum quality standards for tea traded internationally.
''Better quality should increase demand while preventing low quality tea from being traded should curtail the oversupply situation in the world tea market, but the difficulty is to agree on internationally acceptable quality standards, the report added.
At its last meeting in 2006, the Intergovernmental Group on Tea recommended the adoption of ISO 3720 (ISO stands for the International Standards Organization) as the minimum quality standard for black tea entering international trade.
The report notes that ISO 3720 applies to black tea only, but work on standards for green tea is also underway.
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