Prolonged drought in tea-growing countries, drop in use of fertilizers affecting global production of poplar beverage

Doron Peskin, 08.30.09, Ynet.

The price of tea in the Middle East is expected to rise in the coming months, according to experts of the Dubai Tea Trading Center (DTTC).
 
In a statement released recently, DTTC said the price hike stemmed from a drop in tea harvest following droughts in the growing countries and the drop in the use of fertilizers in 2008, due to their increasing price as a result of the rise in oil prices.
 
These factors have led to a drop in the supply of tea in global markets, and in light of the rising demand – a leap in the prices of tea is inevitable, DTTC said.
 
So far, the price of tea appeared not to be affected by the global financial situation. Moreover, the demand for tea saw a significant rise in recent years as its consumption was linked to a healthy lifestyle and proper nutrition.
 
"As a result of a drought in the three largest countries in the tea growing industry earlier this year, there is a significant drop in the harvest, leading to a drop in supplies," explained DTTC Director Sanjay Sethi.
 
"In the first half of 2009, the total shortage in produce in India, Sri Lanka and Kenya was estimated at about 85 million kilograms. In other words, a 20% drop (in the crop) compared to the same period last year."
 
The three countries mentioned are responsible for about 60% of the global production of tea.
 
India's tea harvest dropped to 62,590 tons in April – a 22% drop compared to the harvest in April 2008. The situation is as bad in Kenya: The tea harvest in the first half of 2009 dropped by about 11.5% to 139,000 tons. The problem in Kenya is the drought condition created in the important growth areas. The drop in the production of tea in Sri Lanka in the first half of the year totaled about 24%.
 
Tea is a very popular drink in Middle Eastern countries, which are responsible together for about 25% of all global imports. Dubai founded the Tea Trading Center several years ago in order to establish the emirate's status as a regional and global center for tea trade.
 
The center's complex, located near the Port of Jebel Ali, has huge warehouses for the storage of different types of tea. The center's members include the main players in the global tea industry.
 
Doron Peskin is head of research at Info-Prod Research (Middle East) Ltd.

More articles from our staff

IPR Profile