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L.N. Revathy

Coimbatore , Oct. 21

RETURNING home after visiting China, a tea delegation not only appears more confident to target markets abroad, but has also realised the need for exploring the potential in markets such as the Russian Federation (led by Kazhakstan and Ukraine), Pakistan, Chile, Sudan, Malaysia, Iraq and Morocco.

Though China tops in acreage under tea plantation at 12.62 lakh hectares, and second, in production, at 835 million kg, domestic producers perceive no threat from China.

"On the other hand, we see more opportunity. The Chinese drink tea like water. They prefer green tea. There is a good chance to move into production of green tea, but we will have to streamline our production to match their taste and preference," observed a member of the producing community.

The producer, who preferred anonymity, told Business Line that black tea production was another area that India could look into, considering the declining production levels and the rising cost for such teas in China.

According to a study, habitual tea drinkers number around three billion spread over 160 countries.

Opportunity apart, the source cited the Malaysian experience with concern. "Despite the similarity, Malaysian producers could not succeed in producing teas for the Chinese market. But, that should not put us off. Effective marketing of our teas is the need of the hour," he said.

Producers foresee challenge in ensuring the taste and expectations of the consumer.

Recapping the competitive advantage of China's tea industry, the source said: "They have a cultural advantage as tea is famed as a national beverage; regional resource advantage, because of the variety and wide-distribution of tea growing areas; product advantage, in terms of six varieties such as black tea, green tea, oolong tea, white tea, yellow and dark tea; market advantage - both domestic and global; technical talent advantage considering the number of tea research institutes; and industry policy advantage with the Chinese Government backing the sector."

"However, in view of the steep rise in labour cost and poor management of its tea producing and operating companies, China could witness a slower growth pace. We should capitalise on our strength," the source said.

Chinese Customs statistics show that the country's tea exports reached 2.80 lakh tonnes in 2004. During the first seven months of 2005, the volumes increased by 11.32 per cent to touch 1.70 lakh tonnes. Its exports have witnessed a steady rise both in volume and value.

"We can succeed only if we produce teas, according to the consumers desire and expectation, instead of concentrating on the quality parameters and cost effective production alone," the source said.

The China trip appears to have sent the domestic tea industry stakeholders' mind rolling. But, for now, the industry is proposing to request the Tea Board to make certain changes in the Market Access Initiative.

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