World’s Tea Industry, as Pandemic Drags On

While pandemic fatigue has certainly set in, most of us are still forced to deal with it—whether learning that our child’s school has closed once again due to staffing shortages, or needing yet another COVID test, or finding out that {fill in blank} is out of stock indefinitely.

The tea world has been hard hit as well. At TeaHaus, our tea shipment—ordered months ago—is, well, who knows exactly. Not here yet.

tea?

We’ve all heard how the ports in California and Georgia are hopelessly congested, coupled with dire shortages of warehouse space and delays in transport both by rail and by truck. European shipping loops are requiring up to 54 extra days, with significant port congestion. In Asia, availability of space and equipment continue to be issues, along with schedule disruptions.

Transport by air also continues to be problematic amid shortages of cargo space, cancellations due to the pandemic, and high cost. DHL notes that “rates further increased in Sep 21. Now +108% higher vs ‘19 baseline” and that these rates are “expected to remain high due to demand vs capacity imbalance.”

Small- and micro-businesses can’t afford these high costs—nor can they afford the long wait times to receive their goods by ship—leaving them in an extremely vulnerable position.

Here’s a quick look at other some developments in the tea world at the moment.

Sri Lanka

Sri Lanka’s total ban on chemical fertilizers, which dismayed tea growers when announced this past May (see The World’s Tea Industry: Fall 2021 Snaphots), was a good idea with bad timing and poor planning.

Changing farming practices while in the midst of an economic crisis—and without concurrent and sufficient education and funding—was never going to be easily achievable, if achievable at all. Last month, tea growers were once again able to import fertilizers, and now all farmers can do the same. Officials are hoping this relieves the current food shortage and spiraling prices.

China

Tea, of course, is one of China’s major agricultural exports. This week, for example, 1300 tons of tea leaves left Sichuan Province by train, bound for Uzbekistan. As an export, tea remains decently strong, unlike other agricultural products. A recent study recommended that China focus “on producing and trading in traditional agricultural products with distinctive regional characteristics”—which means tea is already aligned with desired goals. Many of China’s teas are specific to a region and use ages-old production methods. Hopefully, this recommendation will encourage tea producers to maintain these standards despite the fact that many people are gravitating to coffee and ready-to-drink teas.

tea 1

India

In a country that’s been hard hit by the pandemic and weather events, the tea industry has been reeling for the past few years. Recent headlines are equally dire: “Tea industry heading towards crisis” and “Tea industry is hurtling towards a substantive crisis position.”

No sugar coating here. Less tea has been produced due to weather and pest problems. Tea prices have stagnated, yet wages and production costs have increased.

Adding to the woes, fewer Indians are drinking the tea produced in their own country while tea continues to be imported. Per capita, according to Business World (11/27/21), Indians drink as little as “830 grams per head/year as compared to 1.61 kg per head in the UK or 1.01 kg per head per year in Pakistan.” Limiting imports would help balance this, especially if the tea produced within India is of high quality.

Unilever Global Tea Business

Well, the Unilever global tea business will be less global with its decision to sell off a large part of its tea business (including PG Tips, TAZO, and part of the Lipton brand), retaining the Lipton business in Indonesia, India, and Nepal. This also signals that the future of the tea industry may be perceived as weak or uncertain or unprofitable.

The sale is seen as part of Unilever’s broad strategy to divest slow-growth legacy brands or categories, and concentrate more on ones with a perceived higher growth potential. (Demetrakakes 11/19/21)

This does, of course, leave room for small tea growers that produce small batches of high-quality tea. As people become more educated about tea, they hopefully will seek out high-end tea and will also want to support small growers. Of course, small gardens can ill afford production and transportation disruptions, cost increases, extreme weather events, and other strains.

As tea drinkers, this is something to keep in mind. Where does our tea come from? Who produces it, and who has made it available for us to purchase? Are we helping someone? Are we supporting sustainability?

Our choices do impact others. Because it’s always more than tea.

tea 2


Sources: “1,300 tons of Chinese tea leaves head for Uzbekistan,” ECNS Wire, 11/23/21; Demetrakakes, P., “Unilever sells most of tea business,” Food Processing, 11/19/21; DHL, “Air freight state of the industry,” November 2021; DHL, “Ocean freight market update,” November 2021; Ghosal, S., “Tea industry is hurtling towards a substantive crisis position,” The Economic Times, 11/22/21; KeAi, “Study proposes a two-step plan to combat China’s waning agricultural exports,” Phys Org, Science X Network, 11/23/21; PTI, “Tea industry heading towards crisis,” The New Indian Express, 11/23/21; “Sri Lanka revokes ban on fertilizers,” The Hindu, 11/21/21; “Tea body urges for measures for equilibrium in demand and supply,” Business World, 11/27/21.

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