DUBAI, U.A.E.
Today begins the harvest of China’s annual tea crop, a national holiday marked with picnics and spring walks known as Qingming, or tomb sweeping day.
The origins date to antiquity but since the Tang Dynasty (618-907) Qingming has taken on added significance in the world of tea. Pre-Qing teas, consisting of the delicate first shoots, and news of their ever higher prices each year — trumpets the trading season. Last week a kilo of West Lake Longjing sold for $56,000, several thousand more than the current price of gold.
The tea was purchased by government and military officials as gifts, more important for prestige than as a price-point, but this year’s Longjing is selling for between 10 and 25 percent more than last year, a trend that marks a significant development in China exports.
Spring teas are the most lucrative harvest in China accounting for 75 percent of annual sales, according to the China Tea Marketing Association. These teas make up only 39 percent of the year's production by volume.
This year is off to a good start with pre-Qing plucking beginning as much as a month before the official harvest date. West Lake Longjing is an exception but more common Spring Snail and Melon Seed was selling last week for 20,000 yuan ($3165) per 500 grams and Qiandao jade leaves, a roasted green tea similar to Longjing brought 5,000 yuan ($791) to more than 10,000 yuan ($1,582) per 500 grams.
The USDA’s Foreign Agriculture Service (FAS) tracks the declared value of imports in its Global Agricultural Trade System. Last year the declared value of China imports was $114 million, a total 25 percent higher than the same period in 2010 and a trend that is accelerating. China also keeps track of exports and reported $66 million in wholesale tea sold to the U.S. in 2011, up 18.71% according to Tina Tam, vice manager of import and export at Hunan Tea Co. Ltd.
Tam, who represented China at the 4th Global Tea Forum in Dubai this week said her country sent 23.8 metric tons of tea to the U.S. Total export exports of 322.3 metric tons, to all 120 countries that receive China tea equaled $965 million.
In January the GATS database showed Chinese tea had a declared value of $11.7 million compared to $9.34 million in the same period in 2010. The tea arriving from China is of greater variety as it includes more black tea than in the past and more bagged and processed tea. Sales of black tea represent 35 percent of the total declared value in 2011, up from 25 percent in 2007.
Volume of green teas is significantly greater than black indicating a “value-added” premium. Organic black tea in bags, for example, accounted for $5.7 million of the $114 million and organic green teas accounted for $40 million of the total. Volume was 29 million kilos with bulk black tea accounting for 11 million kilos and black tea in bags accounting for 840,000 of the total.
China Daily reports that tea represents only .0027 percent of China exports by value, a tiny fraction of the consumer goods, machinery and tech sector exports. In 2011 this amounted to 320 million kilos earning $96.5 million wholesale and averaging about $3 per kilo. “The profit margin is only about 5 percent, and sometimes we even lose money,” Li Jiaxun, said board secretary of the Zhejiang Tea Group, China’s largest tea exporter and the world’s leading exporter of green tea.
The International Tea Committee reported U.S. imports from China were 23,862 metric tons last year making the U.S. a distant third among the most important export destination (after 63.5 metric tons to Morocco and 45 metric tons to Russia-CIS). It is inaccurate to apply this tonnage to calculations of declared value as GATS totals do not account for re-exported tea. Both ITC and GATS indicate that China is re-emerging as an exporter following several years in which countries like Kenya took the lead.
Source: China Daily, Chinese Government