Sunday, July 4, 2010

KENYA: More tea will saturate market, warns UN food agency

By NATION - June 30 2010

Food and Agriculture Organisation (FAO) has warned tea-producing countries against increasing sizes of plantations as it would damage prices in the long run.

The United Nations agency urged them to increase income from the crop by marketing the drink more heavily at home and publicising the health benefits of the beverage abroad.

It said exports in green tea will grow more quickly over the next 10 years than black tea as markets in major importing countries are unlikely to expand further.

Secretary of FAO’s inter-governmental group on tea Kaison Chang said the scope for expansion in consumption in traditional import markets like the United Kingdom and Russia is limited.

“Consumers in tea-producing countries drink just a 10th than those in mature import markets, representing a major opportunity for tea-growers if the right marketing strategies are employed,” he said in a report entitled a cup of tea for food security.

Earnings from tea exports account for about 35 per cent of total agricultural export in Kenya and 50 per cent of agricultural export revenue in Sri Lanka covering around 60 per cent of food imports.

The official said FAO composite price for tea increased by 13 per cent from $1.95 (Sh156) per kilogramme in 2007 to $3.18 (Sh254.40) in 2009 due to drought in major producing regions of Asia and Africa.

“The effect of this price increase on the consumer in developed countries was just five per cent in 2009 because of intense competition in the beverages market,” he said.