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Press Release 99/55

FAO PROMOTING INTERNATIONAL TEA TRADE MARK AT INTERGOVERNMENTAL TEA MEETING


Rome, 27 September -- Production and consumption of black tea are projected to rise at about 3 percent a year through the year 2005, according to the UN Food and Agriculture Organization (FAO), which is testing a new Tea Trade Mark to promote the consumption of black tea based upon growing scientific evidence that drinking black tea can form part of a healthy lifestyle. FAO documents prepared for the Intergovernmental Group (IGG) on Tea, which opened a three-day session in Ottawa, Canada today, said the UN agency "seeks to encourage the tea industry to adopt this new campaign because it has the potential to increase overall tea consumption for the benefit of both producer and consuming nations."

The UN food agency said there is an increasing weight of scientific evidence that black and green tea can be an important contributor to a healthy lifestyle for people all over the world. The FAO Tea Mark was designed for use in marketing or communication programmes to promote the potential benefits of black tea. The Tea Mark was developed with financial assistance from the Common Fund for Commodities and the trade in major producing and consuming countries.

FAO documents said that world tea production is set to increase from the 1993-95 average of 1.97 million tonnes to 2.7 million tones in 2005, an annual average growth rate of 2.8 percent. Production in India is estimated at 1.02 million tonnes in 2005, an average annual growth of 2.8 percent from the 1993-95 base. Economic reforms and the national plan to expand tea production in Sri Lanka could boost production in that Indian Ocean nation to 285,000 tonnes, compared to 240,000 tonnes during 1993-95, an annual growth rate of 1.6 percent. FAO says other major tea-producing countries, including China and Indonesia, should also see significant grow in production, while in Bangladesh production is forecast to grow less rapidly. Increases in both yields and planted area are likely to continue to support strong growth in tea production in African countries where Kenyan output is expected to increase at an average annual rate of 2.8 percent. Malawi, Tanzania and Zimbabwe are also expected to increase production significantly.

"World black tea consumption is projected to increase from 1.97 million tonnes in 1993-95 to 2.67 million tonnes by 2005, an annual growth rate of 2.8 percent," according to FAO. Developing countries are forecast to account for the largest part of the prospective increase, with consumption rising from the 1993-95 average of 1.41 million tonnes to 1.95 million tonnes by 2005, an annual growth rate of 3 percent.

The FAO report says, "Black tea consumption in India is projected to continue to rise rapidly, reaching 832,000 tonnes by 2005, an annual growth of 3.2 percent from the base period. In other major markets for black teas such as Pakistan, the Islamic Republic of Iran and Egypt, consumption is projected at 160,000 tonnes, 122,000 tonnes and 90,000 tonnes by 2005, respectively. The reduction of import tariffs and declining prices could have a more pronounced effect on consumption in these countries."

FAO forecasts developed countries, including those with economies in transition, to increase their black tea consumption more moderately than developing countries, at about 2.2 percent annually to 719,000 tonnes in 2005. Consumption in the European Community is projected to increase only slightly in the next decade since higher purchases by France, Germany, Italy and the Netherlands would be largely counterbalanced by the continuing decline in the United Kingdom that began in 1961. In the countries of the former USSR, black tea consumption is projected to increase from 154,000 tonnes in 1993-95 to 250,000 tonnes in 2005, equivalent to an annual growth rate of 4.5 percent, FAO said.

Demand for high-quality packaged tea in the Commonwealth of Independent States (CIS) and the Baltic States "is likely to continue to expand, with demand for packaged tea continuing to exceed the capacity of tea packaging by domestic plants," according to an FAO report prepared for the Ottawa tea meeting. Indications are that the CIS and the Baltic States "will continue to be very important in as far as demand for high quality teas is concerned, and will also represent the markets with the greatest potential for growth, providing they regain positive economic growth relatively quickly."

The FAO projections indicate that by 2005, world black tea production and consumption could almost be in balance at 2.7 million tonnes, representing a growth rate of 2.8 percent for each. Production gains are expected to come largely from higher yields, while the rise in consumption would largely be due to population and income growth. The projections suggest an imbalance in the international market, with a surplus of export availabilities over import requirements reaching 24,000 tonnes by 2005 from an almost balanced market in 1993-95. According to FAO, "This possible imbalance implies that world market prices would be under downward pressure."

Among ways to narrow the trade deficit and improve prices, the most obvious, according to the FAO report, is to expand consumption through promotion. Over the last few years, the IGG on Tea has made major efforts to create awareness of the health benefits of tea drinking and additional scientific medical studies on the benefits of tea will be presented at this 13th Session of the IGG. The project on tea and health, implemented for the Group by the United Kingdom Tea Council, will end in December 1999 and the Group is expected to decide at this session how to continue the promotional activity.

Also on the agenda, further discussion on the FAO Tea Mark as a promotional tool and a guarantee of quality. Still to be decided is the minimum black tea content necessary to use the Tea Mark. Many producer nations would like to see black tea content set at 90 percent, while some consumer nations would prefer a content level of 70 percent because of the widespread consumption of bottled tea in those countries.

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For further information the documents for the 13th Session of the Intergovernmental Group on Tea can be found on the FAO Web Site at the following address: http://www.fao.org/unfao/bodies/ccp/tea/99/default.htm

Or, you may contact Media Officer John Riddle at:
Tel.: (39) 06 5705-3259
Fax: (39) 06 5705-3699
e-mail: john.riddle@fao.org


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