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Tea Biz Podcast | Episode 32

Afghan Tea Market Concerns as Taliban Conquers Kabul | Foodservice Recovery Rates Vary Widely by Sector | Researchers Confirm Heart Healthy Aspects of Tea | PLUS Anshuman Kanoria new owner of Jungpana and Goomtee estates on India's unrealized potential in tea.

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| Afghan Tea Market Concerns as Taliban Conquers Kabul
| Foodservice Recovery Rates Vary Widely by Sector
| Researchers Confirm Heart Healthy Aspects of Tea

Seven-minute Tea News Recap

Tea Price Report
April 21 – Sale 33

India Tea Price Watch

Afghanistan is an importer of green and orthodox black tea from India and in 2020-21, about 760,000 kilos of tea was exported from there. At the moment, the movement of cargo between the two countries stands interrupted. – Aravinda Anantharaman

Features

This week Tea Biz visits Darjeeling, India on word of the sale of the iconic Jungpana and Goomtee tea estates to Anshuman Kanoria, principal at Balaji Agro International and chairman of the Indian Exporters Association

… and then to London where Kyle Whittington reviews The Tea Girl of Hummingbird Lane, a novel by Lisa See.

Anshuman Kanoria discusses his company’s acquisition of two of Darjeeling’s best-known tea gardens.

Restoring Darjeeling’s Reputation from the Roots Up

By Aravinda Anantharaman

The sale of two iconic Darjeeling tea gardens focused attention on the ongoing challenges facing growers in this fabled tea-growing region. Jungpana and Goomtee were acquired by the Santhosh Kanoria Group, which owns the tea export company Balaji Agro International. The group also owns Tindharia estate in Darjeeling. We spoke to Anshuman Kanoria, Chairman of Balaji Agro and Chairman of the Indian Exporters Association about this acquisition. Read more...

Listen to the Interview
Anshuman Kanoria on India’s unrealized potential in tea
Lisa See has written a “brilliantly layered book” writes Whittington

The Tea Girl of Hummingbird Lane

By Kyle Whittington | TeaBookClub

New York Times best-selling author Lisa See has written several novels revealing her fondness for tea. The Tea Girl of Hummingbird Lane, however, uniquely explores the mysterious world of Pu’er. Reviewer Kyle Whittington writes that See’s novel “consists of so many brilliant layers… for the tea reader this is a wonderful story, packed with great tea content that will either develop or ignite an interest in, and a desire to explore the world of Pu’er.” Read the review

Listen to the review
Kyle Whittington reviews The Tea Girl of Hummingbird Lane
A tea break for Afghan farmworkers. Afghans annually drink 1500 cups of tea per capita. Kahwa (a tea and spice blend) and green tea with mint are favorites. Photo by © Karl Allen Lugmayer | Dreamstime.com

Afghan Tea Market Concerns as Taliban Conquers Kabul

By Dan Bolton

Afghanistan is a major tea-consuming nation and a smuggler’s paradise for tea. The country became a profitable middleman by clever manipulation of border regulations that were only recently reined in after decades of openly flaunting Pakistani Customs enforcement.

Since tea trades in US dollars, money in Taliban controlled bank accounts is frozen. Bank withdrawals are limited and in-bound remittances from Western Union and MoneyGram have stopped. The East African Tea Trade Association (EATTA) reports bidding at the Mombasa auction on tea bound for Afghanistan slowed as the Taliban occupied Kabul but EATTA explained that Afghanistan gets its Kenyan tea via Pakistan where there have been no disruptions at all, according to The East African. Shipments between India, another major source of tea, and Afghanistan were halted this week.

Afghanistan’s banks are closed, halting direct deposits for salaried workers. Interbank transfers are subject to sanctions imposed by western powers decades ago to curtail terrorist activity. The Financial Action Task Force, warned member countries they must ensure that “no funds or other assets are made available, directly or indirectly” to the Taliban or face fines and censure by the United Nations and the US along with many of its allies. During the 20 years since the Taliban was last in power, many businesses transitioned from cash and writing checks to digital banking. Prices for basic commodities like bread, oil, and tea have doubled since the government collapsed and the economy is in freefall.

In 2020 foreign aid from the US and Europe accounted for 43% of the economy. Remittances from Afghans living outside the country were nearly $800 million last year, according to the Wall Street Journal. Given near universal sanctions due to a global blacklisting of the nation’s central bank, the Taliban will find it difficult to borrow or trade essential commodities, making taxes on citizens and local businesses the Taliban’s sole source of funds in a $22 billion economy.

It is too soon to know how the collapse of the Afghan government and the return of the Taliban will alter the tea market, but smuggling was rampant during the 1996-2001 Taliban regime. In Helmand province, traders said that “if we smuggle 40kg (heroin), we give the Taliban 4kg.”

Pakistan Customs lists black tea and green tea as two of the five most smuggled commodities. Tea exports to Pakistan surged in 2020, increasing 18.7% in value compared to 2019, making it the world’s highest-valued tea import market at $590 million. Kenya accounted for $497 million of last year’s import spend, growing 27% following a decision by the Indian government to no longer export tea to Pakistan.

Afghans prefer green tea to black, yet hundreds of thousands of kilos of black tea are landed annually at the Port of Karachi, Pakistan. Until recently Pakistan charged a combined 38% tax and duties on tea making the import cost of tea 32% higher than tea imported into Afghanistan. Afghanistan is a landlocked nation so huge quantities of African tea, mainly from Kenya, are delivered to the Pakistani port tax-free, taxed at a low rate at the Afghan border, and then transported to large warehouses where it is broken into retail packets and smuggled into Pakistan. Smugglers pay a 12%-15% bribe and transportation cost, pocketing the difference.

Biz Insight – Pakistan’s Competition Commission considers smuggling to be “the biggest threat faced by the domestic tea industry, causing loss of millions of rupees to the government and forcing legal importers out of business,” according to a 2019 report. A crackdown on violators in late 2020 led to a 55% increase in customs duties collected (a proxy for illegal trade) and evidence of a concerted effort by Pakistan to decrease the cost of legal imports, making smuggling unprofitable.

It will take years to rebuild some US foodservice sectors to 2019 consumer spending levels.

US Foodservice Recovery Rates Vary Widely by Sector

By Dan Bolton

Sales at Quick Service Restaurants (CSR) and the Supermarket Prepared Foods segment are well ahead of pre-pandemic totals but “everyone in foodservice is starting from a really different point,” reports Ann Golladay, senior project director at Datassential Research’s Baltimore office.

Datassential calculates that — overall — consumer spending in foodservice declined from $806.7 billion in 2019 to $701.4 billion in 2021 and will not return to pre-pandemic spending levels until 2023.

Golladay explained to webinar participants Aug. 19 that Fast Casual, once the darling of the industry with the largest real growth will not reach pre-pandemic spending levels before 2023 “and that will be nominal growth that does not include inflation,” she said. Golladay estimates inflation at 5% per year “so you will probably have to back down these projections 10% by then,” she said. Consumer spending at fast casual restaurants declined 19% in 2020. The segment is projected to generate $67.4 billion next year compared to almost $68.7 billion spent in 2019.

A survey of the nation’s grocers found that 74% reported increased sales in 2020. The consumer spend for prepared foods at supermarkets in 2022 will be $38.8 billion, rising by 119% compared to 2019 dollars.

Recreation, lodging, and convenience store foodservice segments will take even longer to recover. Lodging, for example, will have only achieved 71% of its 2019 consumer spend by 2022.

Until workers return to downtown offices, the business and industry foodservice sector, projected to reach pre-pandemic sales of $6.9 billion, will never recover.

Tea Biz Insight – Jack Li, principal at Datassential identified five “x-factors” that could disrupt the official projections. These include new variants, vaccine mandates, additional and extended lockdown, sustained inflation, and a combination of labor and supply chain bottlenecks.

Tea flavonoids reduce risk and severity of adverse cardiovascular events.

Researchers Confirm Heart Healthy Aspects of Tea

By Dan Bolton

Accumulating evidence of tea’s heart health benefits led researchers to conduct an umbrella review describing and critically evaluating the totality of medical evidence to date.

Their findings: “It is reasonable to judge that two cups of unsweetened tea per day has the potential to decrease CVD (cardiovascular disease) risk and progression due to its flavonoid content.”

The peer-reviewed paper authored by Abby Keller and Taylor Wallace and published in the Annals of Medicine, examines 10 years of studies, from 2010 to 2020, that identify several biological mechanisms showing a decreased risk and severity of cardiovascular disease in tea drinkers.

The authors write that “Results of population studies commonly suggest that tea consumption is inversely associated with several health outcomes. Shorter-term clinical intervention studies provide additional evidence that tea consumption has the potential to affect intermediate outcomes and biomarkers of disease in healthy, at-risk, and diseased populations.”

Based on this umbrella review, the researchers observed that the consumption of tea as a beverage “did not seem to be harmful to health; therefore, the benefits of moderate consumption likely outweigh risk.” 

Miriam “Mim” Enck, president of The East Indies Coffee & Tea Company, in Lebanon, Penn., passed away Saturday, Aug. 14 after a short illness. Since 2018 Enck has operated the company founded by her late husband, Walter Progner who started the specialty tea retail business in 1976. She was 75.


Upcoming Events

August 2021

POSTPONED: Beijing International Tea Expo, Beijing China
August 27-30, 2021 | Beijing Exposition Center (the recent coronavirus outbreak forced Beijing authorities to halt all events that attract large crowds. Watch this space for new date when it becomes available.)

September 2021

Caffé Culture Show, Business Design Center, London
September 2-3 | The European Speciality Tea Association will host a Speciality Tea Hub on the exhibition floor with a tea brew bar, a members’ lounge, educational seminars and small exhibitor pods.  Admission is free | Program | Register

Level Up, Virtual
September 29 | The Tea & Herbal Association of Canada will host a mid-year meet up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

Click to view more upcoming events.


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Tea News and Biz Insight – September 17, 2021 Tea Biz

"HEAR THE HEADLINES – Advent International Will Bid $4 Billion for Unilever’s Tea Portfolio | India Considers Halting Imports of Nepal Tea | Sales of Herbal Supplements in the US Reach a Record $10 Billion in 2020 | NEWSMAKER – Rainforest Alliance Director South Asia Madhuri Nanda  | GUEST – Caroline Giacomin, Ph.D., a physicist at ETH Zürich, Switzerland   | FEATURES – This week Tea Biz travels to Switzerland to learn from ETH Zürich physicist Caroline Giacomin the physics of that colorful sheen that rises to the surface of black tea. Is tea scum just that or a revealing indication of goodness in the cup? … and then we travel to New Delhi, India where the Rainforest Alliance’s Madhuri Nanda reveals how practitioners of RA’s sustainable farming methods are evolving toward broader, more holistic ecosystems in Part 2 of our series on Regenerative Agriculture. The Physics of Black Tea Film Have you ever noticed a colorful sheen on the surface of your tea? It appears to break like ice floes in the arctic as the tea cools. Researchers once thought tea film was due to waxy substances contained in tea leaves released during steeping. That is not the case. The delicate film is an interfacial interaction of air, tea polyphenols, and calcium carbonate ions in water. It does not form on white, yellow, green, or lightly processed oolong teas, only black tea. In many parts of the world, soft water prevents the film from forming. Is tea film a fleeting glimmer of color to enjoy or an ugly scum to quickly dissipate with a squeeze of lemon. Caroline Giacomin, Ph.D, a physicist at ETH Zürich, Switzerland joins us to explain the physics of tea film from a study she and colleague Peter Fischer recently published in the Physics of Fluids.  Regenerative Agriculture: A Holistic Approach The Rainforest Alliance's Madhuri Nanda explains that while sustainable farming ensures that agricultural practices do not negatively impact and degrade the environmental, social, and economic aspects of the surrounding ecosystem ̶ the focus shifts in regenerative agriculture toward adopting a broader holistic approach that enhances biodiversity and improves soil health through increased microbial activities that build resilient systems capable of withstanding adverse climatic scenarios."
  1. Tea News and Biz Insight – September 17, 2021
  2. Tea News and Biz Insight – September 10, 2021
  3. Tea News and Biz Insight – September 3, 2021
  4. Tea News and Biz Insight – August 26, 2021
  5. Tea News and Biz Insight – August 20, 2021

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Editor | Publisher | Podcaster | Consultant | Writer Dan is the founder of Tea Journey magazine the Tea Biz Podcast and a contributing editor at STiR coffee and tea. He is the former editor and publisher of Tea Magazine, former editor and publisher of World Tea News, and editor-in-chief at Specialty Coffee Retailer. Dan has traveled widely in the tea lands, speaking on retail beverage trends in Canada and the United States and at conferences in Europe, China, India, Australia, the Middle East, and Africa.

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