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| Tea Times - International Tea Yearbook 1994 | ||
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United States retail food store tea sales (excluding sales by hotels, restaurants, institutional users and small retail outlets) for the 12 months ending July 31, 1994, were estimated at 58,442 tons valued at a record $1.27 billion, compared with 1993 sales of 58,064 tons valued at $1.18 billion. Tea bag sales remained the largest segment of the market, accounting for $472.4 million, followed by liquid (ready-to-drink in bottles or cans) tea, $329.4 million. Instant tea mixes accounted for $283.5 million; herbal teas, $120.1 million; instant, $53.3 million; and loose tea, $10.0 million. Liquid tea sales have been the most rapidly expanding segment of the market, accounting for more than one quarter of the dollar sales in 1994.
Roughly 80% of U.S. tea consumption is in the form of iced tea. Soft drinks, bottled water, fruit juices and alcoholic beverages have been strong competitors, but liquid ready-to-drink teas have been successful in making inroads into the cold beverage market in recent years.
The Tea Council of the USA, Inc. reports that in 1993, Americans consumed approximately 50 billion six-ounce servings of tea, or more than 2.25 billion gallons. Approximately 93% was black tea, five percent green; one percent each, Oolong and flavored teas. On any given day, roughly one half of the U.S. population drinks tea,consuming more than 125 million cups or glasses. Consumption is especially heavy in the south and northeast regions of the country.
Total U.S. sales of ready-to-drink teas (including restaurants and institutional users) are estimated at $1 billion, which is approximating the value of the traditional tea market. The council anticipates strong and continuous growth over the next five years, especially from the ready-to-drink, foodservice and gourmet segments of the market.
Kenya. Kenya's tea industry continues to be a major success story for the agricultural sector. Tea exports now represent the largest agricultural earner of foreign exchange in Kenya, falling second only to tourism. Tea exports in 1993 were valued at $318 million, up from $288 million a year earlier and $273 million in 1991. Production of made tea in 1993 is estimated at a record 211,433 tons. The expansion in output is attributed to favorable weather. The outlook for 1994 was not as favorable. Growing conditions during the first quarter of the year were dry with hot temperatures, followed by the long rains and the onset of colder temperatures in April. Tea output during the first half of 1994 was down 21.7% compared with the same period a year earlier. Tea production in 1994 was forecast to decline 186,000 tons.
The industry's major problems relate to internal transport and factory capacity limitations during peak seasons. This has contributed to lower Kenya's tea quality. For the past five years, domestic consumption has leveled at roughly 23,000 tons. Tea exports are concentrated in nine traditional markets. The potential to significantly increase shipments to these markets appears to be limited. Total tea exports in 1993 increased 13.7% over a year earlier to 188,494 tons. In response to reduced production and contracting level of stocks, tea exports volume was forecast to decline to 171,200 tons in 1994.
Tea prices were exceptionally strong in 1993. The average auction price reached a record high of Ksh.90 ($1.6) per kilogram, up from Ksh.55.57 ($1.0) in 1992. In March 1994, the average monthly auction price hit a record high of Ksh.115 ($2.1 kilogram. Tea stocks at the end of 1994 were projected at 45,560 tons, compared to 52,724 tons at the end of 1993. The reduction in carryover inventory was based on strong tea export demand enjoyed in 1993. (Exchange rate [08/31/94] $1 = Ksh. 54.99)
Kenya's tea consumption in 1993 reached 22,002 tons, down from 23,000 tons in 1992. The reduced consumption level is a result of a sharp increase in retail prices following the decontrol of tea prices in early 1992. The Kenya Tea Packers' (KETEPA) monopoly for supplying tea to the domestic market was eliminated in 1992. Approximately 40 companies have been licensed to buy tea from the auction, and pack and distribute to the local market. Because auction prices have been significantly high, some traders have resorted to stealing made tea for packaging. KETEPA, The African Highland Company and Brooke Bond are the dominant tea packers and suppliers to the local market.
Argentina. The harvest of green sprouts of tea in Argentina for the 1993-94 crop year (harvested October 1993 - April 1994) was estimated at 171,000 metric tons.
Manufactured tea production in 1994 was estimated at 38,000 metric tons, down nearly one-fourth from the 41,000 tons produced in 1993. Several factors contributed to this reduction in output: 1) low prices received by growers last year which, in turn, has discouraged new replantings; 2) poor economic conditions at home resulting from fewer investments; and 3) reduced yields as a result of cultural practices.
Reportedly, Misiones, the main producing province (produces 90% of the country's total) is going through an economic crisis because of lack of investment. It is understood that roughly four medium and small establishments have closed down. Presently, there are four large firms that have taken control of the market, capturing the largest percentage of total production.
The Misiones government also has decided to privatize two drying plants which went to a small local cooperative and a representative of a production company.
Argentina's tea exports in 1993 were estimated at 44,246 metric tons, up nearly 20% from the 1992 shipments of 36,010 metric tons. Foreign exchange earnings from tea in 1993 totaled $39.2 million, compared with $28.5 million in 1992.
Approximately 44% of Argentina's tea exports in 1993 went to the United States, with other major buyers being Chile, Russia and the United Kingdom. Nearly 95% of Argentina's tea shipments are exported in bulk and the remainder in containers equal to or less than 500 grams. Tea exports were expected to decline by nearly 20%, reflecting reduced supplies.
Imports of tea in Argentina during crop year 1993 totaled 118 metric tons. The United Kingdom was Argentina's principal supplier, with 48% of total imports, followed by Brazil with 40%.
Tea consumption in Argentina is declining. Argentines are shifting to yerba mate (a mate tea) because it is cheaper and has a much better advertising campaign than tea. A campaign, backed by a report from the Pateur Scientific Institute in Paris to stimulate consumption of mate based on the proven high content of natural vitamin properties contained in the products, is another reason.
Sri Lanka. The most significant features relating to the Sri Lankan tea industry during 1993 were the rebound in production and exports. Production was up by 30% and exports by 20% over 1992. Improved weather conditions and expanded private sector management contributed to the increase. Despite the surplus tea supply situation worldwide, Sri Lanka retained its coveted position as the world's largest black tea exporter.
Tea imports also increased substantially in 1993 to meet the demand for blended teas for re-export. Weather conditions being favorable, production during the first half of 1994 was up by 11% as compared to 1993. Production for 1994 was projected at 245,000 metric tons. Prices were down in 1994, which has fueled export demand, so exports are running 14% higher (January-May 1994) compared to the same period in 1993. Total exports for 1994 were estimated at 220,000 metric tons. With the election of a new government in mid August 1994, the long-term lease program for Sri Lankan tea estate privatization was placed on hold.
Domestic consumption of tea continues to increase by two to three percent, along with population and income growth. However, tea in Sri Lanka is produced mainly for the export market. Sri Lanka's per capita consumption is estimated at 1.25 kg per year, which includes tea purchased through regular channels and leakage. Almost all of the instant tea produced is exported.
Tea is the cheapest and most popular beverage in Sri Lanka, and is roughly half the price of a cup of coffee and one-fourth the cost of a soft drink. A small quantity of green tea is consumed locally.
The majority of Sri Lankans drink tea in loose form, usually the inexpensive, poor quality dust and off-grade tea, with the better quality teas going for export. Approximately 20% of domestic consumption is in packet form.
India. The Indian tea scenario in 1993 improved considerably over 1992. Production increased, prices were significantly higher and exports improved marginally, but remained below the desired level of 210,000 mt. The year 1994 began with excess tea stocks, declining prices and a further setback of exports to traditional markets. Production was expected to reach 720,000 mt in 1994. However, exports were expected to fall slightly to 176,000 mt. Russian purchases were down, and Iran has yet to sign a contract for 1994 production, with shipments for 1993 still pending. India has had only marginal success in finding new markets.
A survey taken several years ago estimated an annual growth of three to four per cent, 15,000 to 20,000 mt/yr, in domestic tea consumption. The tea industry now estimates the rate is declining and anticipated a 2.7% average growth in 1994, bringing consumption to 570,000 mt, including 541,000 CTC and 29,000 orthodox. Consumption in the western states and rural India is growing more rapidly than in urban areas where tea competes with soft drinks and coffee.
Tastes are changing both at home and abroad to a preference for CTC, with its higher cuppage over the more expensive orthodox varieties. Most big manufacturers in India are emphasizing cost-effective packaging of tea and planning to increase the share of packaged tea in total sales. Roughly 35% of the tea consumed in India is in packet form. India's packet tea consumption is said to be increasing at approximately six percent annually, and the bulk tea market at 2.5%. The rural market is being targeted with a range of low-priced sachets.
Indonesia. Indonesia's tea production in 1993 has been revised upward to approximately 170,000 mt as a result of suitable weather conditions in the major tea-producing areas, more bearing bushes and an increase in the productivity. On the other hand, the government of Indonesia (GOI) estimated tea outturn in 1994 would decrease slightly to 169,500 mt as a consequence of drought-affected areas, especially in the West Java province.
The volume of Indonesian tea exports increased slightly from 1992 to 1993 primarily as a result of increased tea exports to the former Soviet Union countries. The GOI estimates that in the sixth Five-Year-Development period (1994-1998), Indonesia's tea exports will grow at an annual rate of three percent, assuming demand remains strong in the primary import markets and the major competitors continue to have adequate exportable supplies.
The GOI is continuing its efforts to increase productivity by supporting rehabilitation of tea plots with high-yielding clonals. In addition, the GOI is pursuing a policy of diversifying export markets, improving tea quality and offering counter-trade options.
With favorable weather conditions in 1993, increased mechanization, and continued GOI efforts to introduce new clonals and incentives to the labor force, yields are estimated at 1.74 mt per hectare. The average yield in 1994 was expected to decrease slightly to 1.71 mt per hectare as a result of the drought.
In Indonesia, tea is consumed in bags, bottles and tetrapaks. As a result of the competition from bottled water, soft drinks and other packaged beverages in the last several years, the tea consumption level has been stagnant at 50,000 mt per annum or around 260 grams per capita per year.
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