In the latest of the IOE&IT Daily Update’s in-depth assessments of global commodities, we look at a stable of everyday life: tea.
To quote ‘tea guru’ Miriam Novalle: “Coffee is a mere beverage, tea is a way of life.”
For billions of people worldwide, this continues to be the case. Tea has a long, rich history across many continents and according to some estimates it is the second most popular drink across the globe, after water.
In the UK alone, the Tea Advisory Panel estimates that 100 million cups are drank daily.
One report estimated the size of the market at $49bn in 2021, with a potential value of US$93.2bn by 2031.
What is?
Tea primarily comes from two plants: Camellia sinensis or Camellia assamica.
The different variety of teas on sale – green, black, oolong and white – all come from the same plants, just at different stages of the fermentation process.
When a leaf is picked, enzymes in the plant interact with the air and start to oxidate. This process, known as fermentation, turns the leaf brown and increases its caffeine level. Whereas black tea is left to ferment entirely before being processed, the more delicate white tea is ‘fired’ almost immediately upon being picked.
One of the strengths of tea is that the plant is capable of being grown throughout most of the world, unlike coffee, which can only be grown in specific conditions along the ‘coffee band’. Locations as diverse as Scotland, Argentina and India are all capable of producing tea leaves.
In fact, the Royal Horticultural Society has given advice on how to grow, ferment and fire your own tea at home.
From Chinese Lung Ching to Sri Lankan Ceylon to Russian Caravan blend, there are dozens of different variations on sale around the world.
Auctions
Tea is still purchased in old-fashioned auctions. Over three quarters of the global supply is purchased using this method, rather than more modern approaches to selling.
One argument in defence of this system is the openness and the accessibility of simply having people in a room making bids.
India’s Guwahati Tea Auction Centre is commonly regarded as the world’s largest auction house.
According to Tea & Coffee Trade Journal, 11 public tea auction bodies captured more than three quarters of the international tea trade in 2017. This amounted to 1.38m tonnes of tea, representing 77 percent of global tea exports.
Global top five
Data from the International Trade Centre shows that the biggest five global exporters of tea in 2022 were as follows:
Country Value (USD) Percentage of global total
China $2.1bn 28.4%
Kenya $1.3bn 18.9%
Sri Lanka $12.3bn 16.8%
India $376.5m 5.1%
Poland $252.6m 3.4%
The top five global importers were:
Country Value Percentage of global total
Pakistan $565m 8.6%
US $559.6m 8.5%
UK $356.1m 5.4%
Egypt $272.6m 4.1%
Morocco $257m 3.9%
The future
As with many industries, climate change is hitting the production of tea.
Increases to global temperatures and losses of biodiversity are hampering production, resulting in lower crop yields and driving up prices.
In February, the Economic Times reported that a dry spell in West Bengal and Assam could sink production by as much as 25%.
Cai Yiwen, a journalist at the Sixth Tone, found extreme weather resulted in a bitter and weaker crop being produced, threatening the long-term viability of some tea producing regions.
Efforts to support the crop only made things worse, as plants were kept alive using water from local reservoirs already drained by the extreme heat.
However, World Tea News reports that the future of tea might be brighter than anticipated. As Gen Z is more conscious of price and is shifting away from alcoholic drinks, the ‘affordable luxury’ of tea could benefit from this change in consumer habits.