Issue link: http://read.dmtmag.com/i/491359
40 STiR tea & coffee industry international Anji Bai Cha in the cup 1978 1985 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2012 2013 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 China: Tea Production Metric Tons (Thousands) MTs 1985 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2012 2013 China: Tea Production MTs Tea Production, 2011 Share by Volume Other Provinces 34% Fujian 18% Yunnan 15% Sichuan 12% Hubei 11% Zhejiang 10% Softening prices are compounded by the fact that in the domestic market, to be competitive, Long Jing and Anji Bai Cha must be vacuum packed in expensive tins. Tea is a popular wedding gift that is packaged in decorative silk covered boxes with in- store signage, advertising and promotions that add considerable expense for suppliers. In contrast, vendors in Europe and the United States sell these teas largely on their reputation – and deliver the tea in inexpensive pouchs by mail. The price: $34.88 for 50 grams of Anji Bai Cha, about $698 per kilo. The willingness of Korean, Canadian, American, French and Australian importers to pay top price is welcome relief for Chinese suppliers. "Anji Bai Cha is a good example of the dynamic nature of the Chinese tea industry. Another good example, maybe more familiar to Americans, is the case of white tea," explains importer and specialty tea retailer Austin Hodge, founder of Tucson, Ariz.- based Seven Cups Fine Chinese Teas. "Anji Bai Cha barely existed 20 years ago and is now a very common tea. The crop was completely driven by the export market and has always fetched good prices," he said. While less than 1% of this tea is exported, Anji Bai Chai demonstrates that small grower groups can produce quantities of high-price, quality tea that appeal to both domestic and foreign tea drinkers. Import opportunity It takes more than cash for wholesalers to dislodge treasured tea – it requires trust. Global consumption of tea increased 60% between 1993 and 2010. Attracted by the hard currency tea brings, governments in Africa and across Indochina did all they could to encourage exports. Rwanda plants 7 million new plants a year on 7,000 acres. India offers incentives to replace its aging stock that boosts yields. Labor is subsidized and small grower groups are trained to more fully develop their horticultural and tea making skills. Vietnam undertook the most aggressive expansion in the world and is now the fifth largest tea exporter with 80% of the 170,000 metric tons it grows ac- counting for 8.3% of the world's tea exports. Sri Lanka recently launched a global marketing campaign to increase export revenue from $1.5 billion to $2 billion within two years. China set the pace for the expansion from literally zero in 1949 to 1.85 billion kilos in 2013. The country now produces 40% of the world's tea. China has five million acres under tea, an 84.8% increase between 1980 and 2010. In China four million growers hand process or deliver green leaf to 100,000 process- ing factories. Relatively few make tea. In most regions at least 70% sell their leaves to trading companies. Production is up by 425,000 metric tons since 2004 and tea exports are steadily rising. It took more than sweat and hoes to accomplish this feat. Heavy use of pesticides, herbicides and fertilizer used to accelerate production did so at a high price – China tea was cheap but dirty. In 1999 81% of tea tested positive for insecticide Fenvalerate residues, a percentage that has since fallen to 18%. Buprofezin insecticide residue levels that were nearly 40% in 1999 are at 1% or less and tests for Fenpropathrin residue show that it is is down to 5%. China's press refers to Europe and Ja- pan regulations as "increasingly stringent green trade barriers" but acknowledged that the adoption of MRLs (Maximum Residue Levels) by the major importing countries is a compelling incentive to pro- duce clean tea. The Exit-Entry Inspection and Quarantine Services (CIQ) adhere to strict protocols for exports. In Fujian, China's largest exporting province, "the Chinese pesticide new na- tional standard has been officially imple- mented," according to a January report on