world tea production and trade : current and future development by kaison chang – secretary fao...
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World Tea Production and Trade : Current and Future Development
By Kaison Chang – SecretaryFAO Intergovernmental Group on Tea
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Introduction
•Current market situation and outlook to 2023;
•Response to questionnaires by member countries, supplemented by other sources;
•Macro-economic data from the IMF, World Bank and OECD.
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INTRODUCTION
•Grateful to Argentina, India, Indonesia, Kenya, Malawi, Sri Lanka, United Republic of Tanzania, and Vietnam;
•Cooperation promotes: ▫Improving market transparency;▫Fostering market expansion; and▫Value chain enhancement.
•Delegates to review the information presented in document CCP: TE 14/Inf. 3 with its annexed tables 1 to 9, and amend and supplement these where necessary, with updates pertaining to their countries.
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2009 2010 2011 2012 20130
1000
2000
3000
4000
5000
6000
World Production of Tea, 2009-2013
TOTAL TEA BLACK TEA GREEN TEA
thou
sand
tonn
es
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2009 2010 2011 2012 20131400
1450
1500
1550
1600
1650
1700
1750
1800
World Exports of Tea, 2009-2013
thou
sand
tonn
es
5
2009 2010 2011 2012 20130
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
World Consumption of Tea, 2009-2013th
ousa
nd to
nnes
6
7
8
2013 20230
500
1000
1500
2000
2500
3000
3500
4000
4500
Actual and Projected Black Tea Production (thousand tonnes)
9
2013 20230
500
1000
1500
2000
2500
3000
3500
Actual and Projected Green Tea Production (thousand tonnes)
10
2013 20230
500
1000
1500
2000
2500
3000
3500
4000
4500
Actual and Projected Black Tea Con-sumption (thousand tonnes)
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2013 20230
200
400
600
800
1000
1200
1400
1600
Actual and Projected Black Tea Exports (thousand tonnes)
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2013 20230
100
200
300
400
500
600
700
Actual and Projected Green Tea Exports (thousand tonnes)
Concluding Remarks – Production and Exports
•Tea trade increased 5%: earnings by 10% to USD 5.7 billion;
•Contribution to food import bill:▫Kenya at USD 1.3 billion > 50%▫Sri Lanka at USD 1.55 billion = 71%.
•Others :▫Indonesia = USD 155 million; Tanzania
=USD 61.4 million. •Trickle down effects to rural incomes and
household food security were invaluable.
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Concluding Remarks – cont’d•Weaker Composite Price, mostly due to
CTC auction prices, and if there is no correction, this downward trend will continue;
•Growth in demand is in green and specialist tea segments;
•In the medium term, the projections suggest that supply and demand of black tea will be in equilibrium in 2023 at a nominal price of USD 2.81 per Kg. Real price will be lower.
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2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
20230
0.5
1
1.5
2
2.5
3
3.5
FAO Tea Prices USD/Kg Baseline Projections
nominal prices real prices
Concluding Remarks – cont’d•However, if there is no correction in
supplies and assume that output increases a further 5 percent, the impact on prices would be quite dramatic;
•A 40 percent decline over the next 10 years reaching USD 1.82 per Kg in 2023 or an average of USD 1.60 for the decade.
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2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
0.5
1
1.5
2
2.5
3
3.5
FAO Tea Prices USD/kg5 percent increase in World Production
Base Prices Simulation prices
Concluding Remarks – cont’d•However, if the reaction to the declining
prices were to cut back on production, say by 5 percent less than the baseline, then prices could be 27 percent higher for the decade reaching USD 3.4 per Kg in 2023 .
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19
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
FAO Tea Prices USD/kg5 percent decline in World Production
Base Prices Simulation prices
Conclusions
• Caution needs to be exercised;• Greater efforts should be directed at expanding demand,
particularly in producing countries with relatively low per capita tea consumption and relatively strong economic growth, as consumption is already high in traditional markets;
• Diversification into other segments of the market such as organic tea should also be encouraged and the health benefits of tea consumption should be used more extensively in promoting consumption in both producing and importing countries. However, in targeting potential growth markets, recognition of and compliance with food safety and quality standards is essential.
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Thank You!
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