STiR coffee and tea magazine

14 STiR coffee and tea / Issue 2, 2022 (April / May) 4 3.5 3 2.5 2 1.5 1 0.5 0 USD/XE 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 FAO: Tea Industry Can Transform Agri-Food Globally The director-general of the Food and Agriculture Organization of the United Nations (FAO) said on Feb. 23 that tea could play a leading role in transforming global food systems. "To end world hunger and poverty, it is critical that we transform our agri-food systems," QU Dongyu told members of the 24th Session of FAO's Intergovernmental Group on Tea. His opening remarks welcomed a delegation of government officials and tea association representatives from 60 countries to the day-long virtual event. FAO estimated the value of global tea production at $17 billion. Trade is valued at $8 billion. Qu said data indicates an increase in tea consumption during pandemic lockdowns as people took comfort in a cup of tea during the most challeng- ing moments. Tea is a labor-intensive sector that provides jobs and income to many of the poorest rural communities in the world, including women and their families. Nine million of the 13 million people employed in the global tea industry are small- holder farmers, producing 60% of the world's tea. This makes tea an essential contributor to achieving the UN's 2030 Agenda and the Sustainable Development Goals. The tea sector faces several challenges that require urgent attention to achieve that potential, said Qu. These include: the ongoing climate crisis; the need to improve the sustainability of the tea supply chain; low levels of productivity; and price-cost pressure faced by actors along the value chain. Virtual sessions added rich detail in reports researched by staff members of the Committee on Commodity Problems. These include: Beyond COVID Emerging Trends, the Current Global Situation and Emerging Issues, and International Tea Prices: Insights into the Nature of Price Volatility. In addition to providing for the livelihood of growers, tea export earnings represent an important source of revenues, especially for many low-income countries that need foreign exchange to pay for their food import bills and buy goods and services from world markets, writes FAO. The report on price volatility describes the main drivers of volatility in international tea markets and projects a continued decline in real prices through 2035. "In 2021, world tea nominal prices, as measured by the FAO tea composite price, is down 4.4% from last year and have lost 22% since 2017," according to the report. "In real terms, prices are less than 28% of their 2017 level, and for many producers, they are lower than production costs. Recurrent swings in tea prices can represent a source of macroeconomic instability, creating challenges to the livelihood of millions of smallholder tea producers and risks reversing the gains made in living standards." The report calls for "guidance on how to reduce the negative effects of price volatility while strengthening the long-term productivity and resilience of the tea sector." Qu mentioned smallholders several times during his remarks, drawing attention to their need for technical and financial support to invest in pest and disease-resistant varieties and improve productivity. He said the Confederation of Interna- tional Tea Smallholders could provide valuable support in this regard. Global production by smallholders is increasing. In China and Vietnam, smallholders now produce 80% of the tea grown. In India, Kenya, and Sri Lanka, more than half the tea is grown by smallholders, and production by smallholders in Indonesia is nearing 50%. Tea Report

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