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Tea projects and common fund for commodities.

Tea projects and common fund for commodities

Several projects were identified at the Inter-Governmental Meeting on Tea held in October, 1990 in Rome under the auspices of the FAO for submission to the Common fund for Commodities for funding. The Second Account of the Common Fund is expected to become operational early in 1991, and several Commodity Institutions are in the process of preparing project profiles for submission to the Fund. According to the operating guidelines of the Common Fund, the International Commodity Body (ICB) that sponsors the projects should be an international organization with membership open to all states that are members of the United Nations. It should also consist of both producers and consumers of the commodity as well as deal on a continuing basis with the trade, production and consumption aspects of the commodity.

The Food and Agricultural Organization as the parent body of the Inter-Governmental Group on Tea has already advised the Governing Council of the Common Fund that the Inter-Governmental Group on Tea fulfills the criteria to be recognized as the International Commodity Body for Tea, and has requested that the Group be designated as the International Commodity Body for identifying and sponsoring the developmental tea projects for funding from the Common Fund. Following this arrangement, the delegates assembled at the Eighth Session of the Group held in October, 1990 proceeded to examine several possible projects which could be put forward to the Common Fund for possible funding.

The Group attached great importance to the positive impact of tea consumption on health. Most delegates strongly highlighted the importance of presenting an image of tea as a health drink. It was stated that tea is not only a beverage with no health hazards, but more importantly there is emerging medical evidence that tea has positive effects on certain types of cancer, cardio vascular diseases and diseases arising from fluoride deficiencies. In view of the growing evidence of the link between tea and health, the Group decided to sponsor a Research Project titled "Tea and Human Health." Major elements of the project design would be to cover all teas with special concentration on black tea, to collate the already available information on the beneficial health aspects of tea and thereafter to further research, develop and highlight the positive health aspects of tea consumption. Many delegates expressed the view that this project should be accorded the highest priority.

The Group also decided to apply to the Common Fund for financing Generic Tea Promotion Projects. A document was presented by the FAO Secretariat appraising the promotional opportunities for tea in four selected countries, namely United Kingdom, Egypt, Saudi Arabia and Poland. The document provided the budget estimates for generic promotion in each of the selected countries as well as the media strategy and promotional plan. The Group discussed the potential growth of these markets, consumers preferance for tea, the feasibility of launching promotion campaigns and the cost-benefit of promotional investment. After detail deliberation, the Group resolved that the Project for Generic Promotion should be selected as one of the priority projects for seeking financial support from the Common Fund.

Many delegates urged that one of the strategies for improving the market outlook for tea is to encourage the universal application of the minimum quality standards which would lead to the removal of low-grade teas from the export market. The Group agreed that quality improvement continued to be one of the most promising ways of encouraging tea consumption and enhancing market prospects, and that high priority should be given to efforts to assist developing countries in raising the overall quality of tea produced.

Implementation of ISO Standard 3720 for tea was considered essential by many delegates from both exporting and importing countries if higher tea prices are to be achieved. The need for cooperation by importing countries in efforts to remove substandard teas from the export market was particularly stressed by several delegates. It was suggested that the FAO Secretariat should examine the possibility of obtaining cooperation of importing countries in monitoring quality standards at Ports of delivery.

Improved up-to-date and continuous information on all aspects of the world tea economy is necessary to enable the exporting countries to react appropriately to market changes. It would also facilitate the assessment of the longer-term outlook for the world tea market. The present data on speciality teas is scanty and limited. Some delegates expressed the view that speciality teas is a market segment which has considerable potential for the future and would produce an additional outlet for tea marketing. The FAO Secretariat was requested to undertake a study on the demand potential for such products and to furnish a report at the next Session.

Several delegates stated that in recent years wooden tea chests have become exceedingly expensive as well as 'environmentally unfriendly.' The Group agreed that packaging and presentation could be also another project for seeking financial assistance from the Common Fund.

The meeting was attended by delegates from nearly 25 tea producing and consuming countries, apart from representatives of multi-lateral Agencies. The Group elected D. Love of the United Kingdom as chairman and R.S. Jayaratne of Sri Lanka and M. Were of Kenya as vice-chairmen.
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Author:Sambasivam, T.
Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1991
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