At a time when East Africa is mired with , much talked about, unsold stocks of ageing tea India is on a completely different trajectory. With a current shortfall in crop of 60MMkgs (mainly CTC, same as Kenya!), increased exports of 20MMkgs and a call, in the offing, for an early close of production by November 30th, there is every opportunity for this market to be down 120MMkgs by the end of the year.
Now what has this all done for the markets. Well the market is understandably buoyant with good teas selling in excess of 400Rs/Kg at auction or $3.20/Kg, unlike Kenya where the average struggles past $2.00/kg.
Of course volume is one thing but so is quality and the impending closure in November is to force out poor tea from the market and to ensure a period when farmers can only focus on preparations for the next season, a forced pruning and rest period if you will, ensuring the best possible start to the next season and the best quality that comes from those first months. Not a bad plan in the writer's view.
Now, with Kenya's quality seasons in calendar juxtaposition to India's maybe there is a lesson to be learnt here. Maybe Kenya should consider a forced intermittent closing of gardens for pruning and regenerative activities after the new year quality has dissipated? Too drastic!, not the same, as equatorial year round growth! I hear you say but rather than the action itself, consider the reason behind the thought of this considered mandate.
From Purbatea Exports Ltd weekly report we learn that the CTC market this week sold 86% of offerings ad the orthodox 94% and this is reflected in the prices being attained, with the ATA remaining above $2.80/Kg
Contract this with East Africa where, in the ATB report, 47% of the main sale remained unsold and 85% of the 7MMkg in the M4 sale (That for multiple reprints). Here, in the main sale the All tea average was $2.10/Kg but with a huge spread between Rwanda at $2.95/Kg and Tanzania @ $0.92/Kg.
Of course, we all know the differences between the quality and brand equity of each of these offerings which serves a jolly good lesson it what to do next; concentrate on quality and if the terroir, planted stock, climate, expertise, access to market cannot be improved then stop. To underscore this, a startling extract from ATB's website showing returns for Rwanda and Uganda, two adjacent tea producing countries, over the last 3 complete years.
Note too the divergence of values over 3 years for Uganda, in the wrong direction, versus the consistency for Rwanda; this speaks to more than the regularity of production and more to the consistent demand assured to those Producers who dependably focus on quality.!
This is as much a message to Governments as it is to Farmers and Producers, as it is the former that has, for the most part created the "diversions" under which tea has been planted!
India is taking the right approach, the idea being to restrict production from any period that is not optimal for making great tea; that the loss in volume made will be more than made up for in the value of product produced and that consumers, lest we forget them, will be more inclined to purchase tea if it maintains a minimum level of excellence!
More global alignment on protecting quality and building "tea's" brand equity, rather than that of a singular origin will serve us all better.
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