Sri Lanka
The traditional markets in Middle East and North Africa absorb over 150 Million kgs or 50% of Sri Lanka tea exports volume annually.
Russia is the single largest buyer of Ceylon Tea and with other CIS countries the region accounts for 24% or 75 Million Kgs of the annual Sri Lanka Tea Export volume.
Impact:
The tea industry contributes approximately 2% of Sri Lanka’s GDP, generating 65% of agricultural export revenue.
China
Almost 2/3 of the tea produced is consumed domestically in China. Unlike domestic consumers who are able to buy their tea in tea stores and supermarkets, international consumers rely on supermarkets as the major channel to buy tea. Tea is second only to water in terms of consumed liquids by consumers, and it has become one of the most wanted commodities for consumers due to the health benefits that have been discovered.
India
India is the 2nd largest producer of tea behind China and exports over 900,000 tonnes per year, but also keeps a substantial amount of their tea for their own consumption. Indian Teas that remain in India include Mohani Tea, Limtex, Godjreg and Gujarat Tea. India exports to Great Britain, the United Kingdom, Russia, Iran and the United Arab Emirates. India’s Darjeeling tea and its chai blends are well known around the world, but much of the black or green tea exported from India gets “blended” at Tea factories around the world owned by multinational corporations such as Unilever (Lipton) Tata Global Beverage (Tetley) who blend their own unique brands which are then sold in other countries such as Canada and United States as Lipton, Tetley, Salada Tea and PG Tips.
Social Issues
There is a discrepancy between the cost of raw materials and the price that consumers pay for tea. Tea prices in the world markets have been historically low and this is reflected in the daily wages of Indian tea workers. Tea workers generally earn about 115 rupees a day ($1.75 US per day), but as producer costs have risen due to increased fertilizer, fuel and transportation costs and because tea is often traded in U.S dollars (which has been volatile for the last few years), there has been an increase in cost to produce tea, which has not historically been passed on to consumers and as a result, tea workers continue to be paid less than minimum wages in India.
Example of Instant tea prices at Kroger’s for common U.S. tea brands – P.G. Tips – $4.69 (40) Red Rose – $5.19 (100), Liptons $5.89 (100), Tetley British Blend – $4.57 (80), Premium Stash Tea – $3.99 (18)
On the other hand premium loose teas sold through specialty tea stores such as Teavana or health or natural food stores can charge anywhere from $5.00 – $20.00 lb for custom blended specialty loose teas and consumers will pay for the premium brands.
Climate change has also impacted tea crops with extreme weather changes like droughts, excessive rain, overtaxed soil and older tea plants which have all contributed to lower yields.
In a positive direction, through civil society organizations pushing for reform in the tea industry, sustainability standard systems such as the Rainforest Alliance (RA), Fairtrade and Utz Certified provide verification, validation and certifications based on standards that generate ecological, social and economic benefits to tea workers and growers. These organizations attempt to ensure that tea workers receive decent wages greater than or at least the legal minimum wage, are treated more fairly and have the opportunity to receive better health care, schooling and housing than those who work for non-certified tea estates.
Issues with certification – sometimes the fees are too high for new or small time tea farmers – those that need the help the most, large corporations can easily pay the fees and may choose to become certified strictly for the right to put the certification label on their packaging whether or not after they meet the standards required by the organization to keep up those standards or go back to their old ways as soon as they are certified
Only a small percentage of tea consumers look for or are prepared to pay the additional cost for certified tea. Many consumers like the idea of certified tea and the positive impact it has on tea workers, but they aren’t willing to pay the additional costs for a cup of tea all of the time. As consumers become more socially aware of how and under what circumstances that the products that they love to drink or eat are produced, more consumers will become socially responsible and environmentally responsible.