Revolution is brewing in the tea trade
Novel infusions like purple tea are changing the market
THE dozens of buyers sitting in serried semicircles in the weekly tea auction chamber in Mombasa were a picture of hushed concentration, eager not to miss the batches they identified as their favourites.
“Apart from the introduction of some technology, it’s been like this for decades,” said Brian Ngwiri, the trade development manager at the East African Tea Trade Association, which runs the 61-year-old auction in Kenya’s main port city.
But change is looming in the colonial-era building.
Although the exchange has traded only black tea produced by the crush, tear and curl method since its inception, with speciality tea demand around the world on the rise, the tea association is considering expanding its auction to green, purple and other teas.
The diversification is buoyed by buyers saying there is a growing willingness among tea drinkers to pay more for speciality teas. In the US, more people are drinking tea, with tea shops popping up nationwide.
The speciality tea push comes as tea farmers, facing rising production costs and a downward trend in prices, are diversifying in search of higher returns.
Like growers of other “soft” commodities, they have had to endure volatile prices. The average hammer price at the Mombasa auction last year was $2.29 a kilo (about R30), 16% down on 2015 and 20% lower than in 2012. Prices have recovered this year as a result of a drought across East Africa, but few people expect them to remain high.
Unlike crops such as coffee and cocoa, tea is not traded on a futures exchange, and the Mombasa auction sets global benchmark prices. Last year, 408 000 tons, a record high, were sold from nine producing countries at the exchange. About 80% came from Kenya, the world’s largest exporter and third-largest producer of black tea.
Speciality tea accounted for less than 1% of the 473 000 tons that Kenya produced last year. But the Kenyan government expects speciality tea production to quintuple in three to five years.
In recent years, Kenyan farmers have started producing green tea, and the even more specialised purple tea. This new cultivar was introduced in Kenya in 2011 after research — much of it done in Japan — showed that it contained high levels of anthocyanins, the super-antioxidants found in blueberries and pomegranates.
Researchers also claim it helps recovery from some skin conditions and chronic illnesses.
However, purple tea suffered a rocky baptism. According to Paul Bain, president of JusTea, a tea importer and seller based in Vancouver, Canada, the processing had not been sufficiently refined. After years of work, Bain is one of those relaunching the product. He believes purple tea could be “the biggest development in tea in the last 2 000 years”.
Henry Njeru, who has planted about a quarter of his 222ha tea estate with purple tea plants, says the crop now sells to exporters for up to $30 a kilo.
“People seem convinced by the health benefits,” he said.
Kenya’s tea directorate has licensed seven cottage factories to produce purple tea, and two months ago the Purple and Speciality Tea Association of Kenya was formed.
Black tea produced using traditional methods of withering, rolling and oxidisation, which is popular in Russia and Iran, also commands a price premium of about 20% over crush, tear and curl tea. Last month, the Kenya Tea Development Agency said it would spend 880-million Kenyan shillings (about R110-million) to fit 11 factories with equipment to produce orthodox tea.
In recognition of this progress, the East African Tea Trade Association is beginning a sixmonth feasibility study this month to determine whether to IMMERSED IN THE BUSINESS: A woman bearing a conical wicker basket (gerla) collects tea on a plantation in Limuru, near Nairobi, Kenya expand the auction beyond crush, tear and curl tea to orthodox, purple, green, white and other speciality teas.
“Production of speciality teas in East Africa is growing and we want to be the one-stop shop for both exporters and buyers,” said association MD Edward Mudibo. “We’d start small, perhaps once a month, and see how it goes.”
Njeru said there was no official data yet for purple tea exports but estimated it was probably 60 tons last year, a similar amount to the 56 tons of Kenya’s green tea exports.
The main market for purple tea is Japan, but it was attracting interest from China, North America and Europe, he said.
That will be tested this month when Tumoi Teas, of Nandi in the Rift Valley, takes its purple tea to the World Tea Expo in Las Vegas.
Jacob Kahiu, chairman and CEO of Union Tea Brokers in Mombasa, said the good news for speciality tea producers was that the quality of most Western supermarket teas was declining as the big brands focused on volume and low prices.
“This opens the door for betterquality teas and speciality teas.”
But he was sceptical about speciality teas’ long-term prospects. “The challenge is that marketing has become very expensive and the small players cannot afford the millions of dollars the giants like Tetley and Lipton can.” — © The Financial Times
Kenya expects speciality tea production to quintuple in a few years
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