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Indian brews to spice up Chinese tea market

By Siva Sankar | China Daily | Updated: 2018-10-30 10:31
Tea garden workers wearing japi hats made out of bamboo and palm leaves pluck tea leaves at Durgabari Tea Estate, on the outskirts of Agartala, India, on May 25, 2017. [Photo/Agencies]

Evolving consumer tastes, upgrade in consumption and low import tariffs driving demand

India's exporters of strong-bodied, flavored teas will pull out all the stops to serve China, the world's fastest-growing tea market that is outgrowing its fixation with mellow green tea and orthodox varieties, said participants at a Sino-Indian tea trade seminar in Beijing on Wednesday.

China's consumption upgrade, evolving consumer tastes, and the government's opening-up policy marked by relatively low import tariffs are presenting unprecedented opportunities for India's tea exporters, they said.

In 2010, India exported around 2 million kilograms of tea to China. In 2017, the figure swelled to around 9 million kg, a fraction of India's total exports of 247 million kg.

Arun Kumar Ray, deputy chairman of the Tea Board of India, the federal regulator, said the next target is 20 million kg by 2022 as there is immense growth potential in the China market.

On the anvil are technological upgrades and organic farming to overcome concerns like residue of pesticides and traces of chrome in processed tea leaves, which should help comply with stringent Chinese standards.

Moves are also afoot to allow Chinese buyers to participate in India's electronic auctions of a variety of tea stocks, which is expected to facilitate greater control over quality and prices.

E-commerce, branding and promotional events, partnerships with Chinese tea distributors, tea appreciation classes and research to evolve fusion-style flavors by brewing Indian tea the Chinese way are among the planned activities, industry insiders said.

All these opportunities are arising because Chinese consumers, both millennials and old-timers alike, are eager to evolve past mellow, orthodox teas so as to enjoy strong, flavored milk teas.

India is home to a plethora of teas. Its black tea, ready-to-drink brews, spiced teas like masala chai, and flavored varieties have been making steady inroads into the China market, said Sujit Patra, secretary of the Indian Tea (producers') Association.

China's relatively low import tariff of 7.5 to 15 percent (compared to 30 percent in Russia, a big export market for Indian tea), the mainland's strategy to import commodities from multiple markets, China's pro-trade philosophy, and the Indian tea's price advantage are conducive to grow bilateral tea trade, industry insiders said.

Since Indian tea has already met strict quality standards of key export destinations like Japan, Russia and the ASEAN markets, confidence is high that it will find acceptance across China soon, they said.

China consumed 1.9 million metric tons of tea worth 235 billion yuan ($33.8 billion) in 2017, with imports of around 30 million kg worth around $150 million coming mainly from Sri Lanka, Kenya, Uganda and Vietnam, industry data showed.

India, being in the neighborhood and a potential larger supplier of better teas at lower prices, will likely enjoy a distinct edge from now on, experts said. "The potential in China is so huge it's incalculable," said Madhav Sarda, managing director of Golden Tips Darjeeling Tea.

Agreed Wang Qing, president of the China Tea Marketing Association. "The quality of Indian black tea is excellent and stable. Its varieties have unique flavors and charming aromas. The Indian and Chinese tea industries can learn from each other, and explore a common platform for cooperation for mutual benefit in international trade."

Ji Mu, a tea culture trainer, said, "Indian tea is a very exciting addition to the local social scene. I'll recommend various blends to my clients as they are keen to experience strong, stimulating flavors."

Liang Jinning, general manager of Beijing XinKang-Ning Industry and Trade Co Ltd, one of the largest foreign tea distributors in China, said, "Consumers' feedback, and my own view, is that Indian tea quality is better and cheaper. Although China grows black tea, it's not strong but mellow in taste, like Vietnam's. With proper branding, the constraints of bulk imports from India can be overcome. In the next three years, I see Indian tea consumption in China increasing by 2-3 times."

Xuan Juan, general manager of Beijing Dongli Garden International Trading Co Ltd and an India tea evangelist in China, said, "I've been importing Indian tea for 13 years, and I've no doubt it can promote bilateral cultural exchanges and peace in the long term."

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