How and Where Tea is Purchased

Sri Lanka

The processed tea will be sent to brokers, usually located in Colombo. The tea is sold at the Colombo tea auction which is held weekly and it handles around 3 – 7 million kilograms of tea per week. The Colombo tea auction is the main channel to sell tea in Sri Lanka. Only around 5% of tea is sold using other channels such as direct selling.

Impact:

Colombo, being Sri Lanka’s capital, is where most of Sri lanka’s business occurs.  The tea sector in Sri Lanka has always been a vital component of its economy. It is also the country’s largest employer, providing employment both directly and indirectly to over 1 million people.

 

Sri Lanka Chain 1

China

Tea dealers/businessmen and enterprises engage in tea products products trade within the country. Dealers will either wholesale it or retail it to consumers for profit. Based on distance from processing factories, there are different tiers of purchasing:

  • 1st tier- They purchase wholesale and develop 2nd tier purchasing.
  • 2nd tier- engages in wholesale and retail.
  • Retail- purchases are conducted in stores, supermarkets, tea stores

The producing tea dealers and businessmen also engage in auctions and sent to brokers. China also has tea commodity fairs where they wholesale tea, Guangzhou is famous for their tea commodity fairs.

Social Issues

Currently in China, there is something called a disordered distribution. Chinese consumers place a high importance on the origin of tea, but some tea companies take advantage of this. The tea factories who produce and sell tea, can apply for protection of their geographic location and put it on products to distinguish themselves. However, for those who don’t, factories who sell tea to dealers will also give their location and will have the factories’ location on it instead and sell it at a higher price.

India

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Most wholesale tea is sold at Tea E-Auctions in India. There are 6 E-Auctions in India including Kolkata, Siliguri, Guwahati, Cochin, Coimbatore and Coonor which are all regulated and supervised by the Tea Board of India. (red flags in google map) They handle more than 500 million kilograms annually.

Social Issue

The Tea Board and Government of India are continuously trying to promote tea exports to countries like the U.S., Russia, Iran, Pakistan, Egypt and the United Arab Emirates on behalf of the Tea Auctions in order to increase the supply and demand for exports of Indian teas. Trying to increase exports will only put more pressure on the tea estates to increase their yields of tea on already overtaxed tea bushes and trees and/or look for more potential land to convert  into tea estates and thereby continuing to disrupt the natural geography of India by reducing rainforests and causing deforestation and putting more strain on the already unacceptable work and living conditions that tea workers face.

 

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