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Green Tea Production (Tons) (Ton) 0 100000 200000 300000 400000 500000 600000 700000 800000 900000 1000000 CCP:TE 10/CRS 20 E May 2010 COMMITTEE ON COMMODITY PROBLEMS INTERGOVERNMENTAL GROUP ON TEA Nineteenth Session New Delhi, India, 12 – 14 May 2010 MARKET DEVELOPMENTS IN SELECTED COUNTRIES – CHINA The Nineteenth Session of the Intergovernmental Group (IGG) on Tea Development of Tea Industry in China Prof. Chen Zongmao Tea Research Institute, CAAS Overview of presentation • Introduction • Production and international trade • Marketing channels and analysis • Factors affecting demands • Market Development trends Tea is one of the most important cash crops in China In 2009 • Tea planted Area: 1.867 million hectares First in the world. • Tea Production: 1.35 million tones First in the world. • Tea Exports: 303 thousand tones • Tea Farmers:80 million Map of tea growing area in China (20 provinces) North of the Yangtze River tea growing area South of the Yangtze River tea growing area (yield for 2/3) South-west tea South China tea growing area growing area, 15-20% of total yield 1. Production and International Trade Yield 160 140 120 100 80 60 40 20 0 2009 2008 and yield in China 2007 2006 Trends of tea production area 2005 Planting area (10 000 hectares) 2004 Picking area(10 000 hectares) 2003 total output (10 000 tons) Area 2002 200 2001 180 160 2000 140 1999 120 100 1998 80 60 1997 40 1996 20 0 Tea production of China in 2009 • In 2009, tea planting area and harvest areas covered 1.867 million hectares and 1.38 million hectares, rising by 6.9% and 6.6% from 2008, respectively. • The total production reached 1.35 million tones and output value amounted to 41.36 billion RMB , increasing by 7% and 16.9%. Structure trends of Chinese tea 2008 2007 2006 Other tea production 2004 (tons) Pressed tea production (tons) Oolong tea production 2000 (tons) Black tea production (tons) 1996 Green tea production (tons) (ton) 0 100000 200000 300000 400000 500000 600000 700000 800000 900000 1000000 In recent years, Green tea and oolong tea is continual increasing; black tea decreased from 1998 to 2003, but rose since 2004; compressed tea is relatively stable; other kinds of tea also increased rapidly. Production of different kinds of tea in 2008 • Green tea : 92.7 thousand tons, 72% of the total production. • Oolong tea: 14.4 thousand tons, 11% of the total production. • Black tea: 6.97 thousand tons, 6% of the total production. billion 8 7 6 5 4 3 2 1 0 2009 2008 2007 2006 2005 adily, in which green k tea, dark tea and Trends of tea exports of China 2004 Export volume (10 000 tons) Export value (billion) 2003 10 000 tons 35 2002 30 25 2001 20 15 2000 10 5 1999 0 In recent years, the amount of tea exports grew ste tea, oolong tea and white tea increased, while blac other special teas decreased. Tea Export & Import of China Year Export Quantity Export Value Import Quantity Import Value (Thousand tons) (Million US$) (Thousand tons (Million US$) 1999 199.6 33.8 1.9 0.3 2000 227.7 34.7 2.4 0.4 2001 249.7 34.2 1.7 0.3 2002 252.3 33.2 1.7 0.3 2003 259.9 36.7 2.9 0.4 2004 280.2 43.7 2.3 0.6 2005 286.6 48.4 2.8 0.7 2006 286.6 54.7 3.2 0.8 2007 289.5 60.8 5.3 1.3 2008 296.9 68.2 5.4 (+1.9%) 1.8 (+38.5%) 2009 303.0 (+2%) 70.5 (+3.3%) Tea Exports of China in 2009 • China exported of 303,000 tons of tea that worth $705 million, only increasing by 2.0% and 3.3% from 2008, respectively. Among these: • Green tea: 229.3 thousand tons and 5.25 hundred million dollars. • Black tea: 40 thousand tons and 64.37million dollars. • Oolong tea: 24 thousand tons and 66.86 million dollars. • Scented tea: 5.914 thousand tons and 29.63 million dollars. Tea Imports of China in 2008 • The trade amount of tea was 302,300 tons in China, and 5,398 tons for imports. • Most of the imported tea were black tea, reaching 4,306 tons and accounting for 79.77%, while green tea was 944 tons , accounting for 17.49%. 2. Marketing Channels and Analysis Current distribution channels of tea in the domestic market of China Tea Refining Factory C O N Tea Trade Market Tea farmer Specialized Dealers S Tea Plantation Retail Shops U …… M E Deep-Processing R Enterprises The Analysis of Market Share In 2009, total tea production in China amounted 1340 thousand tons . Among these, the domestic consumption occupied 77.3%, the exporting amounts occupied 22.7%. Exports 22.7%. Domestic consumption 77.3% Main Tea Exporting Countries Exporting amount of Chinese tea (ton) 70000 60000 2005 50000 2007 2009 40000 30000 20000 10000 0 Morocco Japan Uzbekistan America Russia Tea domestic consumption in China • Green Tea, 725 thousand tons in 2009. • Accounting for 70% of total domestic consumption. Tea domestic consumption in China • Oolong tea, 124 thousand tons, 12% of total home consumption. • Scented tea, 82.8 thousand tons, 8% of total home consumption. Tea domestic consumption in China • Black tea, 20.7 thousand tons , accounting for 2%. • Other kinds of tea such as brick tea, puerh tea, white tea and yellow tea , 82.8 thousand tons , accounting for 8%. Ready-To-Drink Tea consumption in China 3. Factors Affecting Demands ◆The Levels of Incomes ◆ Consumer’s personal custom and hobby ◆ Consumer ‘s knowledge and consciousness about tea Relation between urban household incomes and tea consumption in 2008 Per capita tea consumption (Kg) 0.39 0.4 0.35 0.3 0.3 0.25 0.2 0.2 0.15 0.1 0.05 0 Low income Middle income High income households households households Note: The data is limited to the residents’ direct purchases, does not include the group’s consumption. Consumer’s personal custom and hobby • People in Tibet and North west of China usually consume larger quantity of tea, followed by those in big or middle cities. • People in the north of China prefer scented tea, while southern consumers prefer green tea. • People in big cities such as Beijing, Tianjin, Shanghai, Hangzhou etc. like to drink high grade green tea like Longjing tea and Biluochun tea etc . • People in Guangdong, Fujian and Taiwan provinces like oolong tea best…….. Consumer ’s knowledge and consciousness about tea • With the elevation of living standard in China, public awareness and demand for safer tea has rising significantly, they shift consumption concept from price-based to safety-based, and consumption of organic tea is rising. • Functional healthy tea becomes a new trend. Consumer ’s knowledge and consciousness about tea • A questionnaire investigation was implemented randomly by more than 300 people in Beijing. • Result showed that consumers are mostly concerned on tea quality among price, brand, service, packing, discount, producing area and quality. • 33% respondents put quality in the first place, when buying tea, and then are producing area and price. Main reasons for drinking tea by consumers in China others, influce of culture of tea, 2.75% family(friends ), 16.10% 24.73% relieve refres hing thirst, (health) effects , 17.72% 38.70% 4. Market Development Trends of Tea in China Consumption style From “brewing” to “Ready to drink” From “hot-drinking” to “cold-drinking” From “drinking tea” to “ using tea” Product’s structure From the "single" to "diversity" • Traditional Tea : Green tea consumption is still mainstream, oolong tea will maintain growth, black tea consumption market has begun and is expected to expand. There may be restorative puerh tea market growth. • New tea products: Deep-processed tea product and health tea consumption will increase rapidly, and fast consumption teas, especially tea bags and instant tea consumption are expected to be greatly increased. Brand development From “famous tea" to “well-known brand” China's major tea brands in recent years have accelerated the pace of expansion of chain sales. Company Name Brand No. of chain Selling-scale stores (million yuan) Beijing Wu Yu Tai Wuyutai 215 532.25 Tea Company Beijing Zhang Yi Yuan ZhangYiYuan 110 409.00 Tea Company Tenfu’s Tea Tenfu 1012 Bama Tea Bama 500 Thanks!.
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