Product Profile: Tea Industry

The global tea market has witnessed a strong and steady growth in the tea production and tea consumption from around the world over the recent decades, while the top tea producing countries are still dominating the global market with their significant tea productions year on year. Globally tea is grown in more than 48 countries. However, only top seven countries including India contributed 90% of the total world tea production.

S. No.	Area	Annual Production (Tonnes)	Share in the Total World Production of Tea (in %)
1	China	2414802	20.2
2	India	1267400	10.6
3	Kenya	473000	4.0
4	Sri Lanka	349308	2.9
5	Turkey	243000	2.0
6	Vietnam	240000	2.0
7	Indonesia	144015	1.2
8	Myanmar	102404	0.9
9	Argentina	89609	0.7
10	Japan	80200	0.7
	Total World Production	5982334

Source: Food and Agriculture Organization (FAO), Data as of 2016.

INDIAN TEA INDUSTRY

Indian tea is amongst the finest in the world owing to strong geographical indications, heavy investments in tea processing units, continuous innovation, augmented product mix and strategic market expansion. Production of tea reached 1,325.05 million kg in 2017-18 (according to the Tea Board India).

Year	North India	South India	Total Production (in Million Kgs)
2013	958.6	241.8	1200.4
2014	965.2	242.1	1207.3
2015	981.1	227.6	1208.7
2016	1054.5	212.9	1267.4
2017	1087.1	234.7	1321.8

Source: Tea Board India

The three prominent tea-growing regions in India are Darjeeling, Assam and Nilgiri. While Darjeeling and Assam are located in the Northeast regions, Nilgiri is a part of the southern region of the country.

Tea production is led by Assam (307.08 thousand hectares), West Bengal (140.44 thousand hectares), Tamil Nadu (69.62 thousand hectares) and Kerala (35.01 thousand hectares). According to estimates, the tea industry is India’s second largest employer. It employs over 3.5 million people across some 1,686 estates and 157,504 small holdings; most of them women.

There is a wide variety of tea offered by India; from Green Tea to CTC (crush, tear and curl) tea to the aromatic Darjeeling tea and the strong Assamese tea, the range of tea available in India is unparalleled.

India’s total export of tea in 2017-18 was worth US $784.97 Million. The top export markets in volume terms for 2017-18 were Russian Federation (48.1 million kg), Iran (31.19 million kg) and UAE (21.63 million kg). In terms of value, the top export markets were Iran (US $126.4 million), Russian Federation (US $120.8 million) and UAE (US $61.2 million).

S.No.	Country	Values in US$ Million
		2016-2017	2017-2018	%Growth
1	IRAN	98.4	126.4	28.5
2	RUSSIAN FEDERATION	108.4	120.8	11.5
3	UNITED ARAB EMIRATES	50.9	61.2	20.2
4	UNITED KINGDOM	50.6	55.4	9.3
5	UNITED STATES OF AMERICA	56.8	51.2	-9.9
6	GERMANY	40.9	42.3	3.5
7	KAZAKHISTAN	34.2	27.4	-19.8
8	EGYPT	8.6	26.6	208.2
9	CHINA	17.3	23.2	34.3
10	PAKISTAN	17.1	23.1	35.0

Source: Export Import Data Bank, Department of Commerce.

Share of the top 10 export destinations in India’s total tea export basket:

Presently India ranks 4^th in the list of top Tea Exporting Countries of 2017 after China. Sri Lanka and Kenya. India has posted decline of 27.5% in their exported tea sales. Also, the tea industry is going through tepid times due to the outdated government regulations and rising demand for tea substitutes which is hurting the domestic tea industry. But the ongoing global shortfall in tea production this year is expected to spell boom for the Indian tea after a below par performance in 2017. Robust domestic demand and higher exports is estimated to help in the price recovery this year.