Global Tea Market

Table of contents.

Introduction...................................................................................2

The production..............................................................................3

Consumption.................................................................................4

Export............................................................................................5

Influence of individual growers......................................................5

Roles of transnational corporations...............................................7

Conclusion.....................................................................................7

Reference list.................................................................................8

With the aid of statistics and practical examples, provide a current account of the structure and operation of the global tea market with reference to the following variables:

1. The production, consumption and exporting of tea

2. The influence of individual growers on the price of tea

3. The role of transnational corporations in the tea market.

Introduction

This assignment focuses or examines the following:

Firstly, it focuses on the demand, supply of tea and how it is transferred from one country to another.

Secondly, it examines the effects or power a person planting tea has in the price of tea.

Finally, the part multinational companies play in many other countries.

World producers of tea.

Countries Production 2008 World total

2004 %change

1 China

1,257,384 metric tonnes 32.36% +46.99%

2 India 805,180 metric tonnes 20.72% +257.122%

3 Kenya 345,800 metric tonnes 8.90% -8.294%

4 Sri Lanka 318,470 metric tonnes 8.19% +6.531%

5 Turkey 198,046 metric tonnes 5.09% +3.369%

The table above shows the producers of tea in metric tonnes.

(Scott and Riggs 2011)

The production

There are four main producers of tea in the global market, they are: China, India, Kenya and Sri Lanka.These countries also play an important part in the supply of tea ( Aginsky 2009).

(Aginsky 2009)

The graph above shows the amount of tea produced by the four major producing countries.

Furthermore, it was estimated by the Indian tea association (ITA) that global tea production has dropped to 44.5 million kg till March.

Consumption

Demand could be seen as the number of goods a consumer or an individual is ready to buy at a stated price (Griffiths 2011).

(Aginsky 2009).

This table shows the global demand and supply of tea.

Turkey, is seen as the as the highest country that demands tea (2.7kg) followed by Ireland (2.7 kg) and UK (2.1 kg).(Sandun 2010).

A huge part of the global tea is demanded by countries supplying it. India which is one of the world's largest producer of tea, exports less than what they produce. (Hatswell 2002)

Export

It was made publicly by the Kenyan Tea Development Agency (KDTA) that Kenya is the largest exporter of tea (Xinhua 2005). But, according to the Ministry of Industry and Commerce 2011, it was recorded that Kenya is the highest supplier.

(Aginsky 2009)

This graph shows the top ten tea producing countries in the world.

The influence of individual growers in the price of tea

Individual growers have little or no influence in the price of tea.

Individual growers of tea achieved Rain forest Alliance qualifications between Unilever, the Rainforest Alliance and Kenyan Tea Development Agency (KDTA) in December 2009 for the very first time ( Mclntyre 2010).

Furthermore, the tea industry provides earnings for more than 250,000 individual tea growers. Also, the tea industry empowers individual tea growers by the following ways:

? Facilitating individual growers to form main suppliers groups into different stage.

? Connecting individual growers so that they will be recognised by the tea board.

? Connecting individual tea growers with a farming university that will support them in their farming exercises

? Putting up study on the dilemma of small tea growers in session with different stakeholders.

(Centre for education and communication 2011)

(FAO Statistical year book 2010)

The chart above, shows the major tea exporters in the world.

Role of transnational corporation in the tea market

Transnational corporations have a huge impact in the tea market. For example, Tata and Unilever are large transnational corporation and they are trying as much as possible to own and amalgamate plantation and processing factories( Hatswell 2002).

Unilever which is one of the biggest transnational company is mutually owned by the British and Dutch and it has a sales of over £30 billion recruiting staff in more than 90 countries in the world in 2002( Morelli 2003).

Unilever purchased 12% of black tea and sells it in over 100 countries in the world. Unilever sells this idea usually through its brand. in two years of introducing their plan, approximately 15% of Unilever's tea is gotten from approved farms such as Lipton Yellow label tea and Tips Tea bag which is gotten from Rainforest Alliance authorised farms ( Mclntyre 2010).

conclusion

Finally, from the preceding pages, we were able to understand the various countries that contribute greatly in the production, consumption and export of tea. Also, the roles multinational industry play in the tea market. In a nutshell, it shows the overview of the tea industry.

References

Aginsky, A., 2009. Market and Industry Report: Russian Tea Market Research Report, [Online]. Available at:

<http://www.russiablog.org/2009/09/russian_tea_market_research_statistics.php>

[Accessed 26 October 2011].

Centre for Education and Communication 2011. Sustainable livelihood for small tea

growers.[online].Available at:

<http://www.cec-india.org/index.php?option=com_content&view=article&id=83&Itemi

=173>

FAO, 2010. World tea production reaches new highs. [online] Available at:

<http://www.fao.org/newsroom/en/news/2005/105404/index.html>

[Accessed 28 October 2011].

FAO Statistical year book,2010.Top Tea Exporting Countries in the World [online].

Available at:

< http://www.mapsofworld.com/world-maps/top-tea-exporting-countries.html>

[Accessed 01 November 2011].

Fernando, M., 2010. Trends in Global Tea consumption. DailyNews, [Online] 15 June. Available at: <http://www.dilmah.biz/newforum/index.php?action=printpage;topic=197.0>

[Accessed 27 October 2011].

Griffiths, .A, and Wall, S., 2011.Economics for Business and Management.

3rd ed. England: Pearson.

Hatswell, W., 2002 Oxfam. The Tea Market- A background study; Economist (2009), September 26, p10. [Accessed 27 October 2011].

Kolkata, 2009. Global tea