Episode 64: The Heightened Urgency of Earth Day 2022
Tea News for the week ending Apr. 15
| Now is the Time to “Invest in Our Planet” | Smallholders Now Own Rwanda’s Largest Tea Factory | Mombasa Tea Auction Completes its Switch to Digital | PLUSUkraine’s only tea garden is producing tasty oolongs from cold-resistant plants that have survived decades of heavy snow during long winters at temperatures as low as 26 degrees below zero Celsius.
Caption: Georgian rootstock (pictured) was used to seed Ukraine’s cold-resistant Transcarpathian tea plantings during the 1950s.
Virtually all the world’s tea is grown between the latitudes 20 degrees north and 20 degrees south of the equator. Rising temperatures in this narrow band threaten tea yields and force growers to consider planting “upslope” at higher elevations where cooler temperatures prevail. Unfortunately, subtropical tea cultivars perish in a hard frost, expected above 7,500 feet. The Zhornyna Experimental Tea Plantation in western Ukraine, is located near 50 degrees north latitude. Planter Maksym Malygin is successfully growing tea under forest cover that has survived heavy snow during prolonged winters at temperatures 26 below zero Celsius.
Caption: Maksym Malygin at his home near Kyiv
Maksym Malygin owner of Zhornyna Experimental Tea PlantationPreparing for winter at Zhornyna in Western Ukraine near Mukachevo close to the border with Poland and Slovakia
Cold-resistant Cultivars are Key to Expanding Tea Lands
By Dan Bolton
The Zhornyna Experimental Tea Plantation is in western Ukraine near Mukachevo, a city of 85,000 located near the borders that Ukraine shares with Hungary, Slovakia, and Poland.Known as the Transcarpathia, this hilly region south of the Carpathian Mountains in ancient times was a part of Kyivan Rus. It was ruled by the Hungarian Empire for 1100 years until World War I and was part of Czechoslovakia until 1945 when it was ceded to Ukraine. The plantation is situated on high ground known as Chervona Hova or the “Red” Mount.
Dan Bolton: Thank you Maxim for joining our podcast. Your first recordings were interrupted by air raid sirens following intense missile attacks near Kyiv where you make your home. What has been the impact of the invasion on Ukraine’s only tea garden?
Maksym Malygin: We planned to carry out classical formative pruning of tea bushes in three seasons, from 2021 to 2023. After the first two years of pruning, we planned to test the winter hardiness of the skeletal branches of the bushes and not cover for the winter. This was planned to be done on 300 bushes that grow on the cleared part of the plantation. Pruning last year showed excellent results, the vegetation of the bushes increased from 15 cm after pruning to 70-80 cm at the end of the season. This April, we planned to cut at a height of 20-25 cm.
We will not do this and lose at least one year. Also, we will not be able to organize the collection of leaves to produce more tea.
“The most ambitious project at the idea stage is the creation of a new two-hectare tea plantation in Ukraine, but right now it’s completely frozen on hold.“
– Maksym Malygin
Dan: It is good to know that you and your family remain safe. I speak for a global tea community that wishes your work will continue without war.
What is the future of Zhornyna as it produces only experimental tea in small batches?
Maksym: We have organized through ways for the development of the Zhornyna project. The first one is gaining experience directly on 300 bushes of the plantation. It’s not possible to make industrial production there, but it’s possible to consistently produce some tea for large tea tastings. The second is the vegetative reproduction of the unique winter-resistant tea. The third is a cooperation with colleagues in Europe on the transfer of tea and growing technologies in harsh climates. The most ambitious project at the idea stage is creation of a new two-hectare tea plantation in Ukraine, but right now it’s completely frozen on hold.
Climate change is forcing planters to move upslope
Zhornyna is near Mukachevo (marked in red)
Dan: Listeners in Europe and northern regions that are experimenting with plantings will be interested in your experiments with temperature resistant cultivars. Will you describe the experiment in greater detail?
Maksym: Analyzing cold-weather characteristics and cultivars is an interesting question. And it’s not that easy to answer.
The history of unique Ukrainian tea plantation began in 1949 when non-varietal Georgian and Krasnodar seeds were sown, as well as seeds of the varieties Georgian No. 2, Kangra and a Japanese-Indian hybrid. This is described in the scientific literature.
We made a map of the entire plantation area with the help of the GPS. The total area is 1.4 hectares (about 3.5 acres). Most of the original farm has been destroyed. The surviving tea plants are located in five places. Each has different morphological features. Unfortunately, we still have not been able to find specialists in the post-Soviet years who could establish a tea variety according to the morphological characteristics of plants.
In this case, we need to use DNA analysis, but for comparison, we need to have data from old Soviet cultivars. My personal opinion is that the 300 bushes in the restored area descend from the Georgian No. 2 variety.
During the past 70 years, tea plants on the plantation have experienced snowy winters when the minimum temperature was minus 26 degrees [see map depicting Hardiness Zones, above]. Last winter, the minimum temperature was minus 15 degrees with virtually no snow.
Until 1999 “Zhornyna” was the most northern tea plantation in Europe. After the Tschanara Tea Garden in Germany emerging (the owners are my friends and colleagues Wolfgang Bucher and Haeng ok Kim) “Zhornyna” lost that status, but remains the most frost-resistant culture of tea worldwide (surviving winters with temperatures down to -26 C).
Given the age and adaptation to the local climate, this tea is likely a Ukrainian frost-resistant subpopulation of Georgian tea. It is my opinion.
In 1949 a team from the All-Union research Institute of Tea and Subtropical Agriculture in Georgia, after surveying much of Transcarpathia south of Kyiv, decided that conditions in western Ukraine on Chervona (Red) Hora Mount near the town of Mukachevo were ideal for planting cold-resistant tea.
Dr. I. I. Chkhaidze supervised development of the experimental tea garden which was one of six in the region. The initiatives were part of a greater project of the National Academy of Sciences of the USSR that in 1950 funded attempts to acclimatize tea on territories including Moldova, Transcarpathia, Crimea, Primorsky Krai, and in the far west the islands of South Sakhalin and Kunashir.
At Zhornyna non-varietal Georgian and Krasnodar seeds were sown, as well as seeds of the Georgian No. 2 variety; along with a Kangra cultivar from India and a Japanese-Indian hybrid.
Photos of the plantation taken during the early 50s were lost. “All we can show is one photo from the archive in Russia and three photos from a book written by Dr. Chkhaidze, who led the team of scientists,” writes Zhornyna tea garden owner Maksym Malygin.
The main goal of the project was “…full satisfaction of Soviet people’s needs for domestic tea.” In Georgia the Soviet Union implemented a similar project during the period 1930-1940 that ultimately supplied 30% of tea consumed in the USSR.
Tea was first planted along the Black Sea coastline in 1885 near Batumi. In 1915 there were 170 Georgian tea plantations covering an area of 1,000 ha. By 1932 the state had established 19 state-run tea plantations and nine factories. The area under tea increased to 25,500 ha. By 1993 Georgia growers farming 56,000 ha annually produced 75 million kg of tea at 70 state run factories.
Scientists considered the Transcarpathia to be the second most favorable region next to Georgia for producing tea, said Malygin. Fifty hectares on the collective were developed and 1.5 metric tons of high quality “Chervona Hora” tea was harvested in 1952
The project was canceled in 1953.
After canceling financial support for research, the plantation was abandoned. Lots of tea bushes were dug and cut out, only their roots remained. Thanks to the efforts of plantation workers tea bushes still grow, but there is insufficient capacity to develop the plantation, Malygin explains.
Among the experimental areas established in the Transcarpathian region only Red Mount’s persisted. Fifty years after the original 50 acres (20 hectares) were planted, only two hectares thrived. In 2000 there were several hundred tea plants still growing, blossoming and fructifying, he said. The bushes stood 1.5 meters high, said Malygin.
Tea bushes over generations grew resistant to constant freezes and give new branches in the spring. Skeletal branches do not have time to grow on their own, he explains.
Before 1999 Zhornyna was the most northern tea plantation in Europe. Plantations established in Germany and Great Britain are now the farthest north but Zhornyna is the site of the most frost-resistant tea cultivars worldwide, he said.
A green arrow marks the Zhornyna Tea Plantation near Ukraine’s borders with Hungary, Poland, and Slovakia.
“In December 2013, my wife and I visited the plantation for the first time and fell in love with this place. So was started the Zhornyna tea plantation conservation project that we call “Tea Grows in Ukraine.”
The first step was to develop technology for the production of terroir and demonstrate that the leaves could produce quality tea. Experimental developments of semi- and full-fermented teas, were done from 2015 to 2021. The results demonstrated the great potential of the Transcarpathian teas, according to experts’ opinions.
The second stage came in 2019, when part of the plantation was cleared. Our attention was then focused on the 300 small bushes. Shelters were built and the tea plants survived the cold winters.
Wet leafOolong liquorTwist leaf oolongEvgeniy Vonizos, Evgeniy Goncharenko, Maksym Malygin, Olga Zhminko and Dmitriy Filimonov hold enough fresh plucked tea to make 100 grams of Zhornyna oolong
Boba Guys make their drinks with real fruit, real milk, real foamed cheese, and real tea, brewed from loose-leaf oolong and other quality varietals, and served with tapioca balls made in their own factory. The bustling chain, now with 20 locations, was co-founded by Andrew Chau and Bin Chen. Chau, a featured speaker at World Tea Expo this week, explains how relentless attention to quality elevated a simple mix of milk tea and tapioca to a $3 billion global segment that is enticing a generation of non-tea drinkers to give tea a try.
Caption: Andrew Chau, co-founder and CEO, Boba Guys.
Co-founder, CEO, and author of The Boba Book Andrew Chau describes the allure of bubble tea.
‘We Really Push the Envelope for Quality’
By Dan Bolton
A business graduate with a master’s degree from the University of California, Berkeley, Andrew Chau worked as a marketing planner and manager at Target and Walmart before co-founding Vergence Media, a digital imaging startup. He later managed e-commerce for Timbuk2, a consumer electronics venture, and worked as a global brand manager for LeapFrog, in Emeryville, Calif. In 2011 he and Bin Chen launched Boba Guys opening their first shop in the Mission District. In 2015 they launched Tea People. The company has since expanded with six locations in Los Angeles and one in New York City.
Dan Bolton: Why is bubble tea a gateway for exploring tea in-depth?
Andrew Chau: I hope I don’t insult anybody by suggesting that you need boba in order to experience tea. There’s a millennia of history with tea. I’m not saying that we’re rewriting all of that history. Tea is something that’s been drunk for thousands of years.
In certain countries, tea is normal, in certain places coffee is normal, in certain places mate is normal. Tea is basically a cultural product. When I say it’s a gateway drink, what I mean is that is how a lot of people get into tea. It brings you into the deep parts of tea; we’re talking about knowing what an oolong is, knowing where tea comes from in the world.
Knowing tea at that depth opens the gate.
There’s a drink that I really love in Taiwan, where my parents are from. It’s made with a high mountain oolong, a buttery tea that you put crema on top. The crema is like ultra milk, some people call it cheese. Sometimes you get a milk mustache drinking it along with the tea. It’s almost like a milk tea, and yes you are having tea with milk, maybe there’s some sugar in it. But what you are really tasting is the body of the drink, which in this case is an outstanding oolong, an Iron Goddess [of Mercy] tea with a milk cap or foam. Ten years ago you would have probably just ordered a Frappuccino.
And that’s how so many people get in. The idea is to get you interested in the tea. Sure it is called a “Frozen Summit Oolong” but drinking it you are starting to understand the profile of that fine tea flavor.
That’s what we do.
We really push the envelope. We source our own tea and sell it to different cafes across the world. Our tea brand pushes innovation, meaning that we do nitro tea because with nitro you have more body and can taste nuances that you wouldn’t get in a hot water steep.
What we do is get people involved.
A gateway is basically like a beachhead, right? It’s where people enter. So you enter the shop and order a simple milk oolong, a Tie Guan Yin, a familiar English breakfast tea, or a Ceylon tea. We capture the best qualifies of these teas in a bubble format.
Dan: Your Boba gateway doesn’t have a sign on it announcing, “no one over 35 allowed.” Boba Guys shops are filled with people of all ages eating and slurping and conversing. They are animated and interact as they poke and play with their broad-diameter straws. Boba is experiential — a drinking occasion that mingles quality tea and a memorable experience. Will you talk about those aspects?
Andrew: People sometimes say boba is a fad. I’m like, well, how is it a fad if two billion people drink milk tea, or have tapioca every day? When boba first came out, it was a kind of dessert. Tapioca and cassava, the plant that it is made from, are native to Brazil. The Portuguese and Spaniards brought it to Southeast Asia. Similar to flan, you have cassava pudding, and cassava cake across Southeast Asia, in Malaysia, the Philippines, and other Spanish and Portuguese colonies. The pudding got mixed into a milk tea culture. In Europe, there’s a milk tea culture in the Middle East, and even in Mongolia and Russia.
So I think that what happened is that it caught on again, in modern times as a kid’s drink because teenagers drink it loaded with a lot of sugar. I was one of those kids, but as I got older my metabolism changed, so I have to watch that sugar.
When we created Boba Guys we purposely made it accessible. The format and taste profile are like what people want in a Frappuccino. We lowered the sugar content and used raw sugar. We make our own sugars. We don’t have any high fructose corn syrup in our stores. That is one way we made it accessible.
Consider matcha. Everybody loves matcha in a latte or shake, but many don’t appreciate matcha’s tea culture. We have tea classes at Boba Guys. I teach people ‘this is a Dragonwell, a Longing green tea,’ or ‘this is a sencha green tea.’ When you grind it up to make it into a fine powder that is essentially matcha. At Boba Guys we layer it into the drink. The technique is known as a pousse-café. You see the layer, it is visually separate versus one giant green mixed latter.
I explain that you’re drinking the entire tea leaf, whereas if you had a Dragonwell Longjing it would just be steeped. So you begin to understand how your body is internalizing all these anti-oxidants, like the catechins and ECGC. When you explain that to people you’re able to story tell. People haven’t been articulating the story of boba.
How do we make it accessible to Americans?
We explain that it is something to enjoy casually. If you want a slight tea buzz and you’re young and just are not a alcohol drinker. Go grab a boba.
That’s what we are seeing now. It’s become a hangout for people. You would never a decade ago hear a regular everyday American want to talk about oolongs. You would hear them talk about green tea and black tea. I think we have come a long way and we want to be much more inclusive.
“When I say it’s a gateway drink, what I mean is that it’s how a lot of people get into tea. It brings you deeper into tea, knowing what an oolong is and what is Pu’er, knowing where tea comes from in the world.”
– Andrew Chau
Bridging Cultures
The Boba Guys sell tea online and supply many cafes and shops. “We started Tea People because we wanted to share our favorite teas with our friends the only way we knew how, by keeping it simple,” said Chau. “We visit the farms ourselves and source our own teas. Our mission is to make quality tea approachable, so we try to make it intimate, straight from the source,” he said.
Rajiv Lochan is the founder of the Doke Tea Estate in Bihar, a non-traditional tea-growing region bounded by West Bengal and Nepal. India no longer requires permits to grow tea, a policy decision driven by increased domestic demand. Lochan foresaw the need to open new tea-growing regions years ago and began acquiring land along the Doke River in 1998. Since then, Lochan’s marketing mastery and tireless promotion have literally put Bihar on the official map of India’s tea-growing regions.
Caption: Rajiv Lochan, founder Lochan Tea and Doke Tea Estate
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Rajiv Lochan founder Lochan Tea and owner of the Doke Tea Estate in Bihar, India
The Rise of India’s New Tea Growing Regions
In 1850 after the British established the Tukvar tea plantation in Darjeeling, India’s tea industry expanded rapidly, felling forests and flattening hills in Assam and terracing the Himalayan foothills to meet global demand.
To fill London’s warehouses, growers planted the Dooars and Terai, much of West Bengal, and the entire length of the Brahmaputra Valley in Assam. In 1940 there were 500,000 acres under tea; by 1960, there were more than 800,000 acres (329,000 hectares) under tea.
Exports rose steadily but beginning in the 1950s domestic consumption climbed even faster. In 1960 India exported 195 m.kgs of tea and consumed 115 m.kgs. Household consumption as a percent of India’s gross domestic product peaked that year at 87.4% percent.Ten years later, exports remained flat at 200 m.kgs, while domestic consumption had increased to 212 m.kgs. Today Indian consumers drink 90% of the tea it produces.
Until last year, registered gardens were permitted in only a few states. In 1960 the Tea Board of India recorded 160,000 hectares under tea in Assam. There were 82,000 hectares under tea in West Bengal (Darjeeling, Dooars, Terai, and West Dinajpur). North India, consisting of the Tripura, Uttar Pradesh, Punjab (Kangra), and Himachal Pradesh (Mandi), cultivated 255,000 hectares.
Bihar grew tea on only 725 hectares (about 1,800 acres under tea).
Growing regions are inherently blessed with tea-enhancing terroir. However, ideal soil conditions, altitude, and micro-climate still require the pioneering vision and gritty persistence of growers like Rajiv Lochan to achieve their potential. Rajiv graduated from university in 1973 with a master’s degree in organic chemistry. He spent his early career managing established gardens where his efficient management complemented his skills in cultivating award-winning teas.
In 1998, the Indian government, noticing the strong growth in domestic sales, issued permits to expand tea lands. Adhering to biodynamic principles, Lochan planted drought-resistant cultivars in the loamy soil along the Doke River. He now produces green, white, and oolong teas and black fusion, combining Assam and Darjeeling teas. It took him ten years to acquire and consolidate smaller plots into the Doke Tea Estate.
Dan Bolton: Rajiv, will you describe India’s domestic market for new regional teas?
Rajiv Lochan: We start with eastern India. Bengalis are very, very appreciative of Darjeeling tea. Calcutta has a direct connection to this growing region and is known to be a tea city.
It’s very unusual to find Biharis, who like orthodox Darjeeling. They are now opening up; yes, this is something good.
Doke Black Fusion is a handmade Bihar tea, a mix of Darjeeling and Assam. That’s why we call it fusion. We sit right in front of Darjeeling, and the cold winds coming from Darjeeling cool the plains for a more delicate tea. Doke has an amber liquor, fragrant aroma, and sweet taste, complex. Mixed together with the strength of Assam, it is full-bodied, slightly bitter morning tea.
Dan: That suggests terroir is important to their buying decision.
Rajiv: They understand; they listen. They’re very appreciative, they come in with questions, and they take the samples. I have a sample pack of about 10 grams which I sell for 60 rupees. They sometimes buy 600 rupees worth of packets.
“We produce very little on 10 hectares but we source teas from all over the region to make different blends and then package it. So we handle about a million kilos of tea every year.”
– Rajiv Lochan
Rajiv Lochan
Dan: Where do customers get their first taste of teas grown and processed in Bihar?
Rajiv: Online. Not many stores stock all these teas, and it is very easy to order online.
Specialty teas are only available in the big cities with lounges and specialty tea shops. I would not say even many of the tea specialty shops.
Amazon has taught India how to sit at home and order very, very comfortably and has created online shopping. All the ladies are very happy sitting at home buying whatever from this thing. Many buy to experiment. Yeah, Amazon has done wonders in India, successful like Coca-Cola.
Dan: Are the websites built by local brands sophisticated? Is delivery by mail or courier?
Rajiv:Teaswan. That’s our website. They do everything online; we do everything else. They handle the ordering and the total thing collection money and all.
Dan: How long does it take online customers to get their tea?
Rajiv: Maximum three days. Three days isvery fair. We also use FedEx, DHL Blue Dart Express, and UPS. Siliguri, since the pandemic is very, very conveniently connected.
Dan: Tea from non-traditional growing regions like Bihar is now accessible but still not well known. Your innovative processing and tireless marketing of green tea and oolongs have earned the brand an international following, representing only a small volume of the million kilos you process locally. You can get higher prices overseas, but in a CTC (cut, tear, curl market), pricing is critical. According to the Tea Board of India, only 22% of Indian households spend more than INRs200 rupees (about $2.50 US per month for tea). What price do you charge local consumers?
Rajiv: Our 250 gram CTC sells for INRs 70 to 90 per pack. Tata costs almost the same, but the quality is better than Tata. The reason for people buying outside Tata is the quality. There are four or five local brands available from Siliguri, so people are not switching, and we find it very easy.
There are now seven factories in Bihar. There are 20,000 hectares under tea, and the total production is 25 million kilos. We package our teas in Siliguri, and most of our market is nearby in Bihar so that we can keep the quality. The shopkeepers prefer stock that is easy to sell.
Quality control is not that difficult; we have one system for packaging one mindset for our local CTC pack. Green tea orders are bigger than Darjeeling. When it comes to exporting CTC to China, we sell bulk 20 tons to the container, maybe 25 containers to one company and ten containers to another company.
We produce very little from the 10 hectares at Doke, but we are basically trading; we are sourcing teas from all over the region to make different blends and then packaging, so we handle about a million kilos of tea every year.
The sourcing people know that we can keep supplying them with the same blend throughout the year because we will source it from hundreds of people. We do our blending, tasting hundreds of samples, then giving them a standard blend that they want throughout the year.
Producers like Williamson Magor walk into the room, and they always say, ‘we are the third-largest producer of India,’ or ‘we are the second-largest.’ Being a very big producer, he’s going to sell only his produce, which he can give a little cheaper than us because he can manage his cost of production. Our cost is the total of buying from many smaller growers at rates that are profitable to the producer himself. Growers might have less overhead lower labor expenses. So, these are two different competing economics that the big buyers understand.
The domestic tea market in India is still not mature; this is just the beginning. The entry of more and more players from different regions will change the scenario, but India is a huge market, and if it opens up, it will really solve the industry’s problems.
Ribbon Cutting Radisson Blu Karat$60 USD | Kilo WholesaleCII Chairman 2018$60 USD | Kilo WholesaleAlways on the phoneDoke Tea Estate on the banks of the Doke River
Tea Biz travels to the UK offices of the International Tea Committee where Chairman Ian Gibbs describes the immediate and potentially long-term impacts on the global tea trade stemming from the ongoing crisis in Ukraine. According to Gibbs, the combination of sanctions and the collective refusal of the world’s largest container shipping companies to deliver or receive goods will interrupt tea shipments to Russia, but no one knows for how long.
Caption: Ian Gibbs, Chairman since 2016 of the International Tea Committee
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Ian Gibbs, Chairman of the International Tea Committee
Payment Concerns Further Disrupt Global Tea Supply Chain
On top of the upheaval in the tea trade caused by the pandemic, new worries include guaranteeing payment for containers of tea without violating sanctions while booking scarce carriers for shipments to the Russian Federation and Ukraine. Stocks of tea in Russia are adequate for several months, but the interruption of scheduled replenishment that averages 120 containers a week will invariably lead to shortages.
As the ruble’s value collapses, Russian tea buyers accustomed to favorable credit terms now find it difficult to secure the financing needed to pay upfront, according to Ian Gibbs, chairman since 2016 of the International Tea Committee (ITC). In 2020 Russia imported 142,000 metric tons of tea, valued at $412 million — a total likely to decline in 2022.Gibbs predicts a dip – but not a big drop in the volume of tea shipped to the world’s third most valuable tea market.
Dan Bolton: Ian, will you put into perspective the impact of the invasion of Ukraine? How will a prolonged crisis impact the global tea trade?
Ian Gibbs: Initially, it will be a very worrying time for many producers. It’s going to affect some more than others. Reduced demand in one market will have knock-on effects elsewhere.
If we look at the main countries from which Russia sources its tea (See chart below, all ITC figures are from 2020), India is likely to be hit the hardest — just over 39,000 metric tons or 19% of their exports went to Russia in 2020. Sri Lanka sent 30,000 metric tons to Russia, representing 11% of their total exports.
On the other hand, Kenya exported 25,000 metric tons to Russia — a significant figure for Russia but a total that represents less than 5% of Kenya’s annual exports.
Vietnam exported 13,000 metric tons to Russia (10% of their total exports). Indonesia exported 8,500 metric tons, a smaller quantity than the other countries I’ve mentioned, but a quantity that represents nearly 19% of Indonesia’s tea exports. So that suggests that Indonesia could be hit quite hard.
Tea is regarded as an essential product and along with other foodstuffs should, I understand, be exempt from the sanctions. But producers will still have considerable issues to contend with, such as finance, which currency to use, the ruble’s depreciation, insurance, and shipping. Regardless of what’s being shipped, many shipping lines have stopped shipping to Russia.
Unlike other occasions when sanctions have been applied, I think that the feeling of the majority of people worldwide — at the government level, commercial companies, and as individuals — is they want to see these sanctions effective as a result of what they are seeing on the television and the internet. So, it’s going to be quite a challenging task, I think, for exporters.
Dan Bolton: Will black tea producers concerned over price and settlement of payments* cut production, or will tea previously destined for Russia find its way to other markets?
Ian: I don’t think producers will cut production. Tea is exempt from sanctions; probably quite a large quantity will be imported by Russia.
However, there will be a hiccough in the short term as the players in the market work out how to deal with the various issues I listed earlier. There is no doubt these issues are substantial, so the market is likely to be adversely affected for a while.
New markets don’t suddenly appear, but I hope that producers (and by this, I mean producing companies backed by their countries’ governments) will use this opportunity to explore new markets, which could be a long-term benefit to everyone.
“I think that the trade-in foodstuffs, including tea, should be restored to normal fairly quickly once hostilities end. I don’t believe that in the long term, there will be a major disruption to trade.”
“I think that the trade in foodstuffs including tea, should be restored to normal fairly quickly once hostilities end. I don’t believe that in the long term, there will be a major disruption to trade.”
Ian Gibbs
Dan Bolton: Will this crisis soon pass? Or do you foresee years of sanctions that permanently disrupt the current alignment of the tea supply chain?
Ian: Everyone wants the whole problem solved very, very quickly. The amount of damage already done in Ukraine means that the effects of this invasion will be felt for a long time.
It will take time to rebuild Ukraine and for trust to be restored between Ukraine and Russia and all the other parties involved.
It will be a while before we get back to normal. However, I think that the trade in foodstuffs, including tea, should be restored to normal fairly quickly once hostilities end. I don’t believe that there will be a major disruption to trade in the long term.
Tea is not alone; other commodities are contending with the same problems. It’s worth noting all this is happening against a hike in the price of coffee over the last year, which has happened for several reasons, and so there is potential for tea to benefit as people can be expected to switch from coffee to tea.
In my view, demand will be there, and I believe the government of Russia will be keen to make sure that people get their tea. It is going to take time to settle down. As far as the tea industry is concerned, I personally believe that it’s a blip — it’s going to take time to sort things out, but new opportunities are invariably out there waiting to be explored — and we have to find them
Tea Exported to Russia (2020)
Total Production (mt)
Total Exports
Exports to Russia
%age1
China
2,986,016
348,815
15,300
4.39
Georgia
5,000
1,800
200
11.11
India
1,257,530
203,565
39,200
19.26
Indonesia
126,000
45,265
8,500
18.78
Iran
19,000
7,000
600
8.57
Kenya
569,536
518,921
25,100
4.84
Sri Lanka
278,493
262,726
30,400
11.57
Vietnam
186,000
130,000
13,000
10.00
Source: International Tea Committee courtesy Ian Gibbs 1 Percentage of tea producing country’s total exports to Russian Federation
Ian Gibbs was elected Chairman of the International Tea Committee in May 2016. On leaving school, Ian served 14 years with the British Army. He joined the tea trade in London in 1990, working with tea brokers Wilson Smithett in the City of London until 2005 when he set up his own company. Ian joined the management board of the ITC in 2009, representing Malawi, and became Vice-Chairman in 2010. Ian graduated in 2017 with a BA (Hons) at the Open University in the UK, majoring in French and International Relations.
*SWIFT is a secure protocol used by 11,000 financial institutions to transfer about 70% of interbank funds. Founded in 1973, SWIFT is managed by the Society for Worldwide Interbank Financial Telecommunication. The EU, UK, Canada, UK, and the US barred seven Russian banks as of March 1 and are expected to add more to the list, according to Reuters. SWIFT announced the disconnect is effective March 12.It is only the second time that the world’s central banks agreed to sanction a country’s banking system, writes Forbes.
Established in 1933, the International Tea Committee (ITC) has provided the tea industry with valuable statistical information for more than 80 years. The ITC is an unbiased, non-profit supported and recognized by many major tea-producing and tea-consuming nations as the official source of timely, accurate, impartial data suited to all statistical requirements. To learn more, visit intea.com
