WORLD – In response to the declining prices of greenleaf tea on the international market, tea-producing countries have proposed new regulations akin to those used to dictate oil prices.
Leading producers from Africa and Asia attribute the price drop to overproduction and insist on production control to ensure better returns and maintain quality.
At a recent meeting in Dubai, member countries discussed the progress of the tea sector and the impact of climate change on tea quality, which has contributed to the low prices.
Participants proposed regulating tea production by limiting it to certain seasons or months of the year, similar to the Organisation of Petroleum Exporting Countries (OPEC) approach to regulating oil prices.
The forum also highlighted the potential for more specialized teas, such as purple tea, to improve market dynamics.
Representing Kenya and other East African countries, the East Africa Tea Trade Association (EATTA) emphasized the need for strategic interventions to address the oversupply issue.
According to the meeting’s observations, large-scale tea production in 2023 resulted in 6.603 billion kilograms being produced, while consumption was only 6.233 billion kilograms.
The Food and Agriculture Organisation (FAO) Intergovernmental Group on Tea reported an increase in tea shipments from Kenya, China, and India, while deliveries from Sri Lanka, the second-largest exporter of black tea, declined.
EATTA Chairman Arthur Sewe noted that although Kenya introduced minimum tea prices in 2021, farmers still lack control over the pricing of their produce. “You need to tie a minimum lesser price to minimum quality,” he stated.
Sewe suggested that increasing demand could help improve tea prices but acknowledged that this is a long-term solution, especially with changes in tea-drinking cultures in other markets.
Indian Tea Association Chairman Hemant Bangur pointed out that the global tea industry faces a demand and supply mismatch, with production outpacing demand.
Bangur highlighted the untapped potential in Africa, where a growing population and rising incomes could make it one of the largest markets for black tea.
Sewe emphasized the need for the tea sector to address climate change impacts and farmer concerns. He noted that the decline in tea quality is partly due to the adverse effects of climate change.
The EATTA proposed measures such as sustaining quality drives, reducing pruning cycles, increasing tea consumption, and regulating new tea plantations.
EATTA reported that global tea production increased from 5.228 billion kilograms in 2014 to 6.603 billion kilograms in 2023, a rise of 26.30 percent.
The EATTA called for the adoption of climate-resilient adaptation strategies in tea-producing countries to mitigate the negative impacts of climate change, ensuring the long-term viability of the tea sector.
