High Tea Prices Set to Continue
13 March 2012 The Food and Agriculture Organization released estimates that forecast higher-than-normal tea prices will continue in 2012.
Demand for black tea continues to rise, outpacing supply since 2009. Black tea accounts for most of the world’s tea production, according to the FAO. Rural incomes and household food security improved with a 2.2% increase of export earnings in tea-producing countries in 2011.
The most recent estimates available indicate that world tea consumption rose 5.6% to 4 million tonnes in 2010 as income level grew in China, India and other emerging economies.
China, the world’s largest tea consumer, saw consumption rise to 1.06 million tonnes in 2010, a 1.4% increase in total consumption from 2009. China remains the world’s largest tea producing country with an output of 1.4 million tonnes and a 33% share of the world’s total, according to the FAO.
Global tea production increased by 4.2% to 4.1 million tonnes in 2010.
The FAO forecasts global black tea production will increase at a rate of 1.9% annually, reaching 3.28 million tonnes by 2021. Prices will eventually level out at $2.75 per kg, the organization estimates.
Green tea production is expected to outpace black tea’s growth rates, due to anticipated growth in China. Production forecasts indicate an annual growth rate of 7.2% and green tea will reach 2.6 million tonnes in 2021.
In its report of the world tea market, FAO says an improvement in the fundamental oversupply situation seen in recent years, with supply and demand coming into greater balance at prices higher than over the last decade. The trend will not continue if growers overreact to current firm prices.
Source: FAO
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