It is the world’s second most popular drink after water — and the mainstay of a $6 billion global industry.
Now the world’s biggest producer of tea says rising demand is exceeding the ability of traditional Asian producers such as India and Sri Lanka to meet it.
Aditya Khaitan, managing director of Mcleod Russel, told The Times that the 142-year-old Calcutta-based company is seeking to acquire land in Uganda, Rwanda and other African countries to develop tea plantations.
“We estimate the world will require an extra 50-60 million kilograms every year to meet demand, but there is no more land available in India to meet that growth . . . Acquisitions are the only way forward.”
Mr Khaitan said Africa was the most promising location to plant new tea bushes, as there are many areas where cultivation is possible but that have not yet been properly developed.
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That contrasts with India and Sri Lanka, where few such areas still exist, and where output has struggled in recent years because of poor weather and recurrent outbreaks of pests.
“Tea production in India will remain stagnant for the next few years,” Mr Khaitan said, adding that last year it fell to its lowest level since 2005.
India remains easily the world’s biggest producer of black tea, with annual output of 980 million kilograms — about 45 per cent of the world’s total.
He said Mcleod Russel has already acquired 60 tea farms in Uganda producing 15 million kilograms of black tea and another in Rwanda producing 2 million. But he said this was part of an “ongoing process” to boost production in Africa.
The group produces 80 million kilograms of black tea a year — just under 4 per cent of world supplies — mostly from estates it owns in the Indian states of Assam and West Bengal.
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Rising incomes in India and Bangladesh are encouraging people to drink more tea, while demand is also booming in other regions such as the Middle East, Russia and Pakistan.
“They are all starting to drink more tea,” Mr Khaitan said.“Tea is considered a healthy beverage and it is also still relatively cheap compared to other soft drinks.”
The world consumes about 3.3 billion kilograms of tea a year, one third of it green tea consumed mainly in China. Black tea, the type customarily consumed in Europe and India, accounts for the rest.
As well as being the biggest producer, India is also the world’s largest single consumer of black tea, accounting for about 830 million kilograms in 2010 — or 37 per cent of the global total.Consumption has increased steadily from 630 million kilograms in 2005.
“The economy is growing here, and tea is a drink which is already readily accepted and consumed,” Mr Khaitan said.
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He said there was major potential for further growth in India. Per capita tea consumption there stands at 750 grams per person per year — well below the UK average of 2 kilograms.
Prices are likely to remain robust in the next few years, because it takes five to six years after planting a new tea bush before it can be harvested.
Figures from the Tea Board of India show that prices at auctions have doubled in the past five years.
Cuppas
Tea consumed per person per year
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2.1kg Turkey
2kg Ireland
2kg UK
1.4kg Iran
1.2kg Morocco
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1kg Egypt
1kg New Zealand
.75kg India