Tea Biz
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Tea News and Biz Insights - January 21, 2022

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HEAR THE HEADLINES – Kenya’s Price Floor is Sagging | Finlays’ Cites Tea in its Top Beverage Trends | The Pandemic Shuffles Tea Export Ranks, a TEAIN22 forecast.| GUEST – Aravinda Anantharaman, Tea Biz India Chief Correspondent India| FEATURES – This week Tea Biz travels to Bengaluru where India Chief Correspondent Aravinda Anantharaman reviews a momentous year for the tea industry in a country that produces 20% of the world’s tea. Her report is the sixth in the series of TEAIN22 year-end reviews and forecasts. | Reorganizing and Reinvigorating India’s Tea Sector –India’s tea industry in 2021 recovered from severe setbacks due to the pandemic. Production totals rebounded in 2021 but exports lagged as global prices fell and logistics costs soared. A shortage of containers led to high freight costs. Export volume declined to a five-year low of fewer than 200 million kilos. Kenya undercut prices at auction for commodity black teas. Fortunately, India’s domestic demand remains firm, consuming 75% of locally grown tea. The year saw the pilot of the Japanese auction model, now named the Bharat auction, that launched in South India in January. Tea Board of India Chairman PK Bezboruah reports that high-quality teas are sold at a 150% premium over medium-quality teas. “The path forward for the organized sector is to focus on quality. Therein shines the silver lining,” he told the Times of India. Tea Biz asked tea industry stakeholders Anshuman Kanoria, Chairman, Balaji Agro International, Head of India Tea Exporters Association and owner of Tindharia, Goomtee and Jungpana gardens in Darjeeling; and Pranav Bhansali, managing partner, Bhansali & Co., what to expect in 2022.

The Tea Biz podcast delivers tea news that you need to know, a recap of the week's major headlines, with commentary and cultural trends. Hosted by Danbol it is the voice of origin for tea professionals and enthusiasts worldwide. Think of us as a digital caravan of story tellers, bringing authentic, authoritative and exclusive stories to you weekly from the tea lands. Hello everyone here. This week's headlines. Kenya's price floor for tea he is sagging. We look at troubled global tea exports. A tea in twenty two forecast and Finlays cites tea among its top bevers trends. More in a minute, but first this important message. What makes a Perfect Cup of Ceylon tea? The Perfect Cup is from the tea businesses that ensure the protection of all the children living within their tea estates. We Salute Kailani, valley, Tell A, wacky Lee, Boga, Wan Thalawa, Harana and Elyptia tea estates support Save the children. Sri Lanka tea prices have firmed following the all this decision to set a minimum for Kenyan te development agency. Tea's sold at the Mumbosa Auction, Kenya's Ministry of Agriculture set a price floor of two dollars and forty three cents per kilo to rescue farmers from a multi year price decline that, in the first half of two thousand and twenty one had average two hundred and three Kenyon shillings per kilo. At one point, averages dipped to a hundred eighty six Kenyon shillings per kilo, about a dollar ninety six per kilo and the US dollars, a ten year low. KTDA operates sixty nine factories and buys from six hundred thou t smallholders. The price was calculated as sufficient to cover production expenses, averting financial disaster for growers facing steep increases in the cost of energy and inputs like fertilizer. The price does not apply to buyers purchasing teas auction by other countries, including Rwanda and Tanzania. In September, prices rallied to a high two hundred and fifty six Kenyon shillings, but by the end of October it was clear the floor was sagging. Prices have since remained above rock bottom, closing a year at two dollars and thirty nine cents per kilo. Fortunately, the...

US dollar has appreciated to the pointed shillings or trading at an all time low. T is purchased in US dollars, resulting in an increase in foreign exchange earnings. According to reports in the star, at two dollars and forty three cents per kilo, Kenyan sellers currently received two hundred and seventy five Kenyan shillings per kilo. Volume remains a concern. During the third quarter of two thousand and twenty one, Exports Total two hundred and twenty four thousand five hundred metric tons, down from a hundred and thirty eight thousand six hundred metric tons during the same period in two thousand and twenty according to Kenya's National Bureau of Statistics, the tea directorate reports the quantity of green leafed livered to factories through June dropped the two hundred and seventy four million kilos from three hundred million kilos during the first half of two thousand and twenty. Business inside as a global tea supplier, can you must contend with the fact that demand is slacked due to the pandemic and that even commodity buyers, including Pakistan, Russia and Yemen, favorite better quality teas. The tea sector remains optimistic that reforms, which experienced a rough ride in two thousand and twenty one, will ultimately benefit growers. The pandemic shuffles tea export ranks. This is the fifth of a dozen tea and twenty two forecasts for the New Year. Te Demand is seemingly boundless and while wave after wave of viral infections, lockdowns and unprecedentedly costly logistics made headlines in two thousand and twenty one, it was rising domestic consumption and producing countries that most impacted exports. By November two thousand and twenty one, China had already exceeded two billion in sales, securing its dominance in tea exports. Production is expected to top two point eight million metric tons in two thousand and twenty one. Two years of pandemic have reshuffled rankings among the tea producing countries, with Turkey likely advancing to number four and export earning she LACA, currently third, may advance to second. Can you will likely fall to third. Well, India remains four and the end of the world second largest tea producer at one point three five million metric tons, except for the biggest setback in volume, but has benefited from better prices. TEAPO would of India. Data through outctober indicates export earnings were up two percent to five hundred and seventy seven million...

...in two thousand and twenty one, despite a nine percent decline and volume. Kenya experienced declines in volume and value. Earnings through Outctober were down nine point one percent compared to two thousand and twenty according to the National Board of Statistics, exports in the third quarter fell to twenty seven point seven billion Kenyon shillings, less than two hundred and forty five thousand dollars us in two thousand and twenty one. Prices increased, but so have costs. Since the onset of covid nineteen, the average price of a forty foot shipping container increased by three hundred and twenty three percent. That he supply chain is becoming more complex as blends incorporate more botanicals. Brands find themselves accountable for environmental and social impacted origin, as consumers insist on sustainable and transparent sourcing, wholesalers are reluctant to share the financial burden. While whether in prices are perpetual variables that rise and fall, consumption per capita climbs reliably year to year. In the and China, the world's top tea producers, now account for sixty one percent of global demand. According to the Economists Intelligence Unit. In China, consumption increased by double digits annually for the decade twenty nine to two thousand and nineteen and now stands at one point six kilos per person per year. In the other, famous for its street cornered Chai, accounts for twenty percent of global demand. In India, the average consumption per person is eight hundred and forty grams per year. The share of output retained for domestic consumption globally, now at seventy percent, has increased from fifty eight point four percent since two thousand and ten. A brief recap of export follows. Be Sure to visit the tbiz website for a more detailed analysis China. Through November two thousand and twenty one, China's export authorities reported more than two billion and exports and eleven point five percent increase in value and a volume increase of three point nine percent to three hundred and thirty seven thousand metric tonus. China exported to billion and mainly green tea, in two thousand and twenty. According to UN calm trade, primary trade partners are concentrated along the belt and rows, with Morocco, the Zebekistan, Ghana, Russia and Mauritania the top five. During the first eleven months of the year, China ship tenzero metric tons to America, up eleven point seven percent...

...in volume and twenty four percent and value. Compared to two thousand and twenty, China exports accounted for thirty six percent of sertified organic t shipments to the US. In Two thousand and twenty one, sales of black tea were three hundred and eighty eight million on twenty six thousand nine hundred metric tons, up one point three five percent by volume and twenty two percent in value. Shr Lanka. Shr Lanka exposed two hundred and eighty eight million kilos in two thousand and twenty one, earning one point three two billion, despite a decline in volume. Exports were one point two billion in two thousand and twenty. According to the Srilanka teaboard. December totals are not yet available, but are expected to bring the cumulative harvest to three hundred million kilos, compared to the two hundred and seventy nine million kilos produced in two thousand and twenty. Pro Activity as a concern. Sher Lanka has a much higher cost of production per hector than Kenya or India. Yields seve decline since October, an indication Sri Lanka is unlikely to top three hundred million kilos in two thousand and twenty two, marking a long period of decline. From two thousand and thirteen one, Shri Lanka produced a record three hundred and twenty eight million kilos. A poor showing in two thousand and twenty two means that Turkey will likely rank fourth among the world's top tea producing countries, surpassing Sher Lanka at three hundred and twelve million kilos. According to EU estimates, Turkey ranks thirty four among the world's tea exporting nations at seventeen million dollars, up ten point seven percent in two thousand and twenty according to contrade, Turkey's domestic market, where consumption per person is the highest in the world, drinks virtually all of the tea grown there. Kenya tea production declined in two thousand and nineteen do to drought and then surged in two thousand and twenty out of sink with demand. In Two thousand and twenty one, price is stabilized. After a period of political turmoil late in the year. The country's tea growers once again found their footing. The New Year began with a high note, as auction prices to average two dollars and forty five cents on good volume. Firming prices are welcome relief following a year in which export earnings decline nine point one percent. Kenya exported one point two two billion worth of mainly black tea in two thousand and twenty. According to Confrede India, export volumes through October decline to a hundred and fifty seven million kilos, down eight point seven percent compared to the hundred and seventy two million...

...kilows ship during the same period in two thousand and twenty. Volume declines were steeper in north India, at twelve percent. According to the Tea Board of India data. Production felt the six point five million kilos and darsling down by half compared to the thirteen million kilos harvested at the turn of the century, and south India export volumes declined by four percent. India exported six hundred ninety two million of mainly black tea in two thousand and twenty according to Confrede Finlays, of venerable name and tea since seventeen fifty annually publish as a report on beverage trends. Tea is cited prominently as both an ingredient and a beverage in this shear's top two trends. A brief recap follows. Visit Finlay's website or the tea bi is blogged to download the free eighteen page report global beverage trends two thousand and twenty two. Finlay's lists the science of health and well being being as its number one trend. Health credentials are the dominant driver in a pandemic scarred world. According to the report, fifty four percent of consumers pay a quote high amount of attention to the ingredient lists on the products they consume. Finlay's notes that in the past, brands mainly communicated health credentials by describing positive benefits like boost and revitalizes quote. We're now seeing greater inclusion of active ingredients such as caffeine or l theonine, through which the perceived benefits are reinforced, reads the report. Quote. Tea is rich in these bioactive compounds, which are growing in recognition with consumers. The report sided one example a survey of Twenty twomo consumers that found sixty three percent believe that green tea, our Macha, has a positive impact on their health. Since two thousand and sixteen, Beverage launches highlighting tea compounds such as EG CG l theonine, polyphenols and catechins have increased thirty percent. Trans number two, natural energy goes mainstream. The number of energy drinks launched with quote all natural claims has increased a hundred and seventy eight percent since two thousand and sixteen. According to mentell's global new product database, green tea is popular as a natural source of caffeine and a...

...range of energy drinks, from shots to Seltzer's quote. Greater levels of urbanization and increasingly busy lifestyles have driven high levels of historic growth in the energy drink category. Clean energy brands like Runa much of our hustle and tensing are trending. According to Finnace. The report notes that sixty six percent of female consumers believe that energy drinks feel both unhealthy and unnatural, versus forty five percent of men business inside. What's next? Finlay's predicts beverages with natural ingredients, that enhanced concentration and mental focus will emerge as the next phase in energy drink innovations, so long as formulations avoid the jitters and caffeine crash. Quote. We also expect to see greater reference to new traffics in the energy drink category. Camfeine and Lthna in are natural examples and quote. There are bind and and there. Man in Bengalururu reports on this week's to auction prices. India tea price support for the weekend in fifteen January, two thousand and twenty two. Two Thousand and twenty two is already started, with a lot of change brewing in the industry. Sri Lanka has proposed to pay off the oil that's to around with Orthodox tick spots and in about a trade agreement. All eyes are on it to see how it impact India stake spots, because you ran is one of the top importers of Indian tea. In two thousand and nineteen it unimportant fifty three million kilos of teeth from India. This has dropped in the last two years. It remains to be seen how two thousand and twenty two were fair within India. The tea boat seems to be actively pursuing reforms and a DART draft Te Promotion and Development Built Twenty Twentyto is expected to be passed and in prices. Sale to north India was not much different from sale one in terms of sentages and prices. Gardens have closed for winter and south India seal to proceeded in the new format of but it auctions. And now for word from our sponsor. Huge trade understands that a successful tea blend goes beyond the creative fusion of appearance, a Roma and flavor. Are Multi Award winning product development team is passionate about converting natural ingredients into sensory experiences that customers crave. Every recipe is formulated with a commercial backbone of dependable quality sourcing, with a pricing structure that supports a safe, regulated profitable and scalable plant q trade meets every brand's retail, food service and e commerce need. For more information,...

...visit our website, que trade tescom. This way, t bills travels to Bengaluru, where Indian chief correspondent, our vendor, an Atheroman, reviews a momentous year for the tea industry in a country that produces twenty percent of the world's team for report is the sixth in the series of tea in twenty two year end reviews of forecasts reorganizing and reintegrating indiast sector. At in twenty two, India Forecast Indias. The Industry in two thousand and twenty one recovered from sevious it backs due to the band of me. Production totals rebounded in two thousand and twenty one, but exports lagged as global prices fell and logistics cost sword. A shortage of containers led to high freight costs. Export volume declined to a five year low of less than two hundred million kilos. Can you undercut prices? Adoption for commodity of Black Tea's fortunately, India's domestic demander means firm consuming seventy five percent of locally grown tea. The year saw the pilot of the Japanese auction model, now named the Barretts auction, that launched in south India in January. Two Thousand and twenty two. teaboard of India Chairman PK but base, borrower the boats that high quality teas sold at one hundred fifty percent premium over medium quality teas start code the path forward for the organized sectors to focus on quality. There in chance, the silver lining end quote hit all the Times of India teabers as tea industry stakeholders and Schuman Canoria, chairman Biology Agro International, head of India Teak Spotters Association and owner of Tindaria, Gunti and Jumpana Gardens in da Je Ling and frontal, been sally, Managing Partner Been Sally and Co. What expect in two thousand and twenty two? Production and prices? The last two years came with severe destructions because of the pandemic and productions impacted. In Two thousand and twenty less than twenty twenty one. The other distructives climate changes. Weather has become unpredictable, unseasonal rainfall and prolonged drought has been extremely challenging. Says Been Sally, I think by the related concerns are here to stay. North and south, Indian rains have become unpredictable and this has had an impact on prices as well as demands. Supply Dynamics. Production volumes are expected to increase, according to Canadia, with a small growers producing more, we can see the usual uptick in production and around the same growth in domestic consumption, both when Sali and Canoria are concerned with our supply of medium and lower tease, when Sally estimates at twenty twenty two, we see record production figures if other destructions are contained and exports. Pandemic greatly impacted India city state sports because of low prices offered by African suppliers. Due to the rising cost of productions, CPC places competitive challenges and global markets, but just how much will depend on the other suppliers? When...

Sally said that Sri Lanka's temporary ban on the use of chemical fertilizers and Kenya's minimum flow price indicate that governments are making bold decisions which could impact the entire industry, reforms, Sis Ben Sally Start Code. There have been a lot of messailers for this new system. I think it's important to recognize that tea has and cannot be treated like a commodity market instrument because of its inherent nature of not being standardized. Differing in his views garden on an exporter instrument cannot are said Code. The existing auction system was working fine and the producers that complain about it at largely those who are quality issues or who dump leftover tease into the system. Focus should have been an improving the auction functioning and competition infrastructure rather than the rules end quote. In Twenty and twenty two, the teaboard has signal that it will move ahead which reforms. Some of what's being asked to fit is include one regular the import of duty free tea into India that was intended for reex sports but has instead been dumped in the domestic market. There is a need to ensure that all te exported is Indian. Team must contain one hundred percent Indian tea to and sure Tea Nepal ty is not passed off as dug linked tea, which includes regulation and testing of all Nepalti entering India. Three, the festus. I must tighten the lass for maximum residue levels so that morty is in line with the EU norms and therefore boost demand for dissociate from auctions and hand over the running of the auction to respective auction committees that already exist and modern manner of conducting such auctions to be at the discretion of stakeholders. And lastly, t bought needs to be remodeled to become a promotion and development directory, but rather than an overregulator. Intrigued by what you heard in today's podcast, would you like to learn more from our global network of t Biz journalists and t experts? Remember to visit the TV is website from more comprehensive coverage. That's wwwert Biz bizcom. Thanks for listening. Farewell, till next week.

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