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China improves its tea export sales.

China improves its tea export sales

China, the birthplace of tea and the world's earliest exporter of the product, was overtaken by India and Sri Lanka in the world tea market in the late 19th century. It is now making every effort to regain some of its lost ground in Black tea, while maintaining its dominance in Green and special teas.

Last year, China's tea exports hit a record of 204,500 tons, an increase of 6,400 tons over the previous year, exceeding Sri Lanka to become the world's second tea exporter, next only to India.

The past decade has also witnessed an annual average growth of 5.7% in China's tea export, compared with an annual 1.6% increase in world tea trade in the same period. Export earnings rose from US$229 million in 1979 to US$420 million in 1989, according to statistics from the General Administration of Customs.

"The steady growth should be attributed to a wide range of our tea varieties and their competitive prices," said Wang Yufeng, assistant general manager of China Tea Import & Export Corporation (CTIEC), the country's official and sole tea exporter, which has branches all over the country.

Teas from China, constituting one fifth of the world's total tea trade, are grouped in three categories: black tea, green tea and special teas. Special teas which include Jasmine, Oolong, Lung Ching, Puer and Biluochun, are produced only in certain areas in small amounts and processed through specific methods.

India and Sri Lanka have a hold on the market of Black tea, supplying nearly 45-50% of world's commercial black tea. Where China has an edge is in Green tea and special teas, of which it is the dominant producer and exporter. Statistics from CTIEC show that China's Green tea and special teas accounted for 64% of the world's total trade in 1979. In 1989 their market share rose to more than 85%.

It is estimated that about two-thirds of China's tea exports are in the form of direct commercial cash sales, while the rest are in the form of government contracts or barter arrangements with the Soviet Union and Eastern Europe. While Black tea exports go primarily to Europe, North America, Oceania and the Middle East, China's Green tea and special teas are chiefly sold to overseas Chinese markets, Japan, North and West Africa, France and Hong Kong. Although Coca Cola and other soft drinks are having an impact on the traditional drinking habits, worldwide tea consumption is rising by 3% annually.

"The Soviet Union is a limitless market," Wang, the CTIEC official said. Improved Sino-Soviet ties and the contamination of a major Soviet tea plantation by the 1986 Chernobyl nuclear power plant accident have contributed to making the Soviet Union a major market for Chinese teas. Tea sold to Soviet Union was 9,000 tons in 1985. Last year the country became the No. 1 importer of Chinese teas, buying 27,800 tons.

China's Green tea is also finding a place in the U.S. marketing at a time when former tea suppliers such as Japan and Taiwan are quietly withdrawing because of soaring domestic labor costs. China sold only 12 tons of Green tea to the U.S. in 1979, but last year exports shot up to 5,300 tons.

To increase tea exports, China has been trying to improve its traditional tea processing methods for better products. A CTC (cutting, tearing, curing) method has been introduced in recent years from abroad for black tea processing. Finished products treated in this way give a stronger flavor than those processed with traditional methods. Because the new technique demands high-quality tea leaves, to date it has been only applied in some plants in Yunnan and Hainan provinces with an annual output of about 10,000 tons. They are exported in tea bags to Europe, the U.S. and Hong Kong.

China's Agriculture Ministry, which oversees tea growing, is also making efforts to raise domestic tea production by renewing old bushes, breeding and expanding new strains and setting up new tea plantations. Tea-growing areas in China cover about one million hectares, one third of which is too old to give good yields. As a result, average annual output per hectare in the country is only 630 kg, compared with a world average of 1,020 kg.

Both the central and local governments have been investing in constructing an export production system. Under a national program, US$6.74 million were allocated in 1986, half of which were converted into loans, for the construction of export bases, the renovation of old fields, expansion of fine bush strains, and the modernization and expansion of processing plants. The program was continued in the following years, with US$1.07 million allocated in 1989. In 1990, about US$1.3 million is being invested in Zhejiang, Hubei, Sichuan and Anhui, according to China Agriculture Investment Company.

Another problem in China's tea sector, according to Chen Zhi, an official from the Ministry of Agriculture, is that it takes almost six months to complete the process of tea leaf picking, processing, packaging and marketing. In countries with better management such as Japan, it takes only a few days. The lengthy process results in tea loss and the fall of prices.

Already a number of multifunctional economic concerns have been established in tea growing provinces such as Zhejiang, Jiangsu Guangdong and Fujian. Such concerns take all tea-related business into their own hands, from tea growing, purchasing and processing, to marketing and research. They are expected to raise economic efficiency and improve tea quality.

"Changes do not come overnight," said CTIEC's Wang Yufeng. "However, with the varieties we can provide and the efforts we are making, we are optomistic about the future of Chinese tea."

PHOTO : China is making efforts to increase production by renewing old bushes, breeding new strains, and setting up new tea plantations.

Hu Xiaohong Journalist
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Author:Hu Xiaohong
Publication:Tea & Coffee Trade Journal
Date:Sep 1, 1990
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