Tea is the second most consumed beverage in the world after water, and its preparation methods vary across cultures and regions. It plays a significant role in daily life, bridging cultural and economic divides. Given tea’s importance in global trade, an econometric approach to analyzing import and export trends provides invaluable insights for companies looking to optimize supply chain management and identify emerging markets.
In recent years, tea has solidified its position as a critical commodity in global markets, with demand patterns shaped by cultural preferences, income growth, and international trade policies. Using quantitative data analysis, businesses can better understand market trends, forecast demand changes, and pinpoint opportunities for growth and market penetration.
Global Market Statistics:
- Total Global Tea Exports: Over the past decade, global tea exports have experienced substantial growth, reaching $77 billion. Projections for 2024 suggest exports will total $7.6 billion, rising to $8.1 billion by 2025. Despite some volatility, the annual growth rate for tea exports signals robust market demand.
- Yearly Performance of Exports: In 2023, tea exports saw a notable decline of 13% compared to 2022. However, the annualized growth rate remains promising, with an impressive 32% year-on-year increase.
- Key Exporters: China leads the global tea export market with total exports valued at $17.7 billion, holding a 23% share of global tea exports. Although China experienced a decline in 2022 and 2023, with a 17% reduction in 2023 alone, the overall trend over the past decade indicates steady growth, supported by a positive annual growth rate of 4%.
- The United Arab Emirates and Germany are competing for fifth place in the global tea export market. From 2018 to 2022, the UAE held this position, recording total exports of $2.3 billion, representing a 3% share of the global market. Despite an 81% drop in exports in 2023 compared to the previous year, the UAE’s long-term outlook remains positive, with a 6% annual growth rate. The role of free trade zones in facilitating re-exports highlights the UAE’s significance as a trade hub.
- Price per Metric Ton: The average price per metric ton of tea stands at $7,200, with a median price around $5,900. Data trends show a consistent rise in tea prices, which aligns with increased demand and the growing importance of premium tea varieties.
- Price disparities exist across countries, with Germany recording the highest average price at $10,200 per metric ton. On the other hand, Kenyan tea, known for its affordability, ranks among the cheapest among top exporters.
- Emerging Markets:
- Japan: Japan has shown rapid growth in tea exports, with total exports over the past decade reaching $1.4 billion. In 2023 alone, Japan exported $210 million worth of tea. The country’s annual growth rate of 8% underscores its increasing significance as a global tea exporter.
- Jordan: Jordan is another rising player in tea exports, having experienced a remarkable 331% surge in 2015. The total value of tea exports over the past ten years exceeded $209 million, with $31 million in exports recorded in 2023. With an impressive annual growth rate of 57%, Jordan’s tea sector demonstrates both dynamism and sustainable growth.
Egypt
- Total Imports: Over the past decade, Egypt imported $2.9 billion worth of tea. In 2023, Egypt’s tea imports totaled $310 million, a slight 2% decrease compared to 2022. The average price per metric ton is $6,800, with a median price of $4,700. Egypt’s import trends over the past decade reveal a minimal decline of 03% per annum.
- Market Share in Egypt: Four major countries dominate Egypt’s tea imports, collectively accounting for 96% of the total. Kenya is the primary supplier, responsible for 87% of imports at an average price of $2,900 per metric ton. India and Sri Lanka each contribute 3%, while the UAE represents 2%. Notably, tea imported from the UAE has the highest price among the top suppliers, averaging $9,700 per metric ton.
- Re-export Tea: Over the past decade, Egypt’s tea re-exports amounted to $127 million, with $16.4 million in exports recorded in 2023. However, projections for 2024 indicate a decline to $15 million, suggesting potential challenges in the re-export market. Despite this, the re-export sector has shown growth in the past three years.
- Rwanda as a Potential Import Market: Rwanda has emerged as a competitive alternative to Kenya, offering a cost-effective option for Egypt due to geographical proximity. Rwanda’s tea export market has grown significantly, with a 53% annual increase in tea imports over the past decade, positioning it as a viable future supplier for Egypt.
Saudi Arabia
- Total Imports: Saudi Arabia’s tea imports over the last decade reached $2.4 billion. In 2022, imports surged to $223 million, an 18% increase compared to 2021. The average price per metric ton stands at $9,700, with a median price of $6,800. Despite declining volumes, Saudi Arabia’s annual growth rate remains slightly positive at 1%.
- Market Share in Saudi Arabia: The UAE is the largest tea supplier to Saudi Arabia, accounting for 49% of imports with an average price of $10,200 per metric ton. Total imports from the UAE amounted to $61 million in 2022, though a downward trend has emerged, with an average annual decline of 2%. Sri Lanka ranks second with a 15% share, followed by Kenya at 9%, each showing positive annual growth rates.
- Re-export: Saudi Arabia’s tea re-exports over the past decade totaled $137 million, with $4.2 million recorded in 2023. However, the re-export market faces challenges, as indicated by a 59% decline in 2023 compared to 2022.
- Jordan as a Potential Import Market: Jordan presents an attractive option for Saudi Arabia due to its proximity and competitive pricing. The country’s tea imports have grown by 23% compared to 2021, and the ten-year average growth rate stands at 63%.
United Arab Emirates
- Total Imports: The UAE imported $3.4 billion worth of tea over the last decade, with $260 million in 2022, representing a 39% increase compared to 2021. The average price per metric ton is $8,200, while the median price stands at $4,500. Over the past ten years, tea imports have decreased at an average annual rate of 7%.
- Market Share in the UAE: Between 2014 and 2016, free trade zones accounted for 74% of the UAE’s tea imports. From 2017 to 2022, three countries – Kenya, India, and Sri Lanka – accounted for 83% of total tea imports, with Kenya leading at 40%, followed by India (28%) and Sri Lanka (16%).
- Re-export: The UAE ranks fifth globally in tea re-exports, with $2.3 billion in total exports over the past decade. In 2023, re-exports amounted to $84.6 million. Despite a decline in 2023, the ten-year growth rate remains positive at 6%.
- Rwanda as a Potential Import Market: Rwanda’s tea export market to the UAE shows great promise, with total imports surpassing $1.4 million. Over the last decade, Rwandan tea exports to the UAE have grown by 269% annually, with a significant 298% surge in 2022 compared to 2021.
Conclusion:
The Tea Import and Export reveals a continuous evolution in both mature and emerging markets, offering significant opportunities for businesses to expand their operations. To capitalize on these opportunities, the focus should not solely be on import and export quantities but also on understanding the types of tea most in demand and consumer preferences across different markets. Price fluctuations are driven by various factors, including changes in supply and demand, as well as the impact of climatic and economic conditions.
Moreover, challenges such as customs barriers and logistical issues present obstacles to the smooth flow of tea trade. However, promising opportunities remain evident, especially in emerging markets. Businesses can leverage these insights to make informed decisions and seize growth prospects in the global tea industry.