Civil unrest in Kenya projected to impact world tea prices – UN report

14 February 2008

World tea prices are continuing to rise because of a tight global supply worsened by a projected 10 per cent decrease in production in Kenya, which has been rocked by civil unrest in recent months, a new report from the United Nations Food and Agricultural Organization (FAO) says.

World tea prices are continuing to rise because of a tight global supply worsened by a projected 10 per cent decrease in production in Kenya, which has been rocked by civil unrest in recent months, a new report from the United Nations Food and Agricultural Organization (FAO) says.

For many years, there was an oversupply of tea, but the FAO report says that prices increased by 11.6 per cent in 2006 and are expected to reflect a further 6.5 per cent rise in 2007.

World tea production grew by more than 3 per cent to reach an estimated 3.6 million tons in 2006, according to the latest available figures cited by the report.

Increases in China, India and Viet Nam should offset declines in major producing countries, according to the report.

The expansion was due to another record crop in China with 1.05 million tons and a record 28 per cent increase in output in Viet Nam, which pulled its production up to 133,000 tons.

An increase was also recorded in India, the second larger producer, where harvests were 3 per cent higher, totalling 945,000 tons for 2006.

Consumers are also drinking more tea, with consumption up by 1 per cent in 2006, reaching 3.64 million tons. Green tea appears to be gaining popularity; black tea production is projected to grow at 1.9 per cent annually while green tea production is expected to grow at a rate of 4.5 per cent.

FAO tea expert Kaison Chang called for strategies to improve demand. “Opportunities for an expansion in consumption and improvement in prices exist in producing countries themselves as per capita consumption levels are relatively low.”

The report was prepared for the Global Dubai Tea Forum 2008, which opens next week with a focus on sharing industry-specific knowledge and best practices for improving tea production and marketing worldwide.

 

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