Two and a Bud 59(2):152-156, 2012 RESEARCH PAPER Global tea production and export trend with special reference to India Prasanna Kumar Bordoloi Statistics & Agric.Economics Deptt., Tocklai Experimental Station, Tea Research Association, Jorhat- 785008, Assam. ABSTRACT The popularity of tea as beverage in the world is well known. Its popularity as beverage encompasses all age groups, geographical locations and social levels. More than 4,000 million kilograms oftea was produced globally in the year 201 0 out of which above 1,700 million kilograms or 43% oftotal production found place in the international export market. Though tea is produced by a large number of countries, the production is dominated by four countries, viz. China, India, Kenya and Sri Lanka. These four countries account for more than three quarters of global production. They are sharing 71 % of the current export market share. In addition, countries like Vietnam and Indonesia have increased their shares substantially both in production and in export in recent times. Therefore, considering the above, an attempt was made to study both production and export trends of major tea producing and exporting countries using long-term data. The destination-wise export pattern oflndian tea is discussed considering the dwindling market share of Indian tea in the global market along with export performance of other exporting countries. INTRODUCTION In the global tea production and export scenario, India, Sri Lanka, China and Kenya are contributing more than 75% of production and 71 % of global export. In addition, Vietnam and Indonesia contribute substantially towards production and export of tea. Vietnam, in particular, has increased its production in the recent past. Indian tea, which maintained its supremacy both in production and in export for more than a century has started to lose its pre-eminence as a result of increase in production and export of these countries. The increase in production in China has pushed India to second position. The production of China surpassed 1000 million kilograms in 2006. In the export front also India has started to lose its supremacy. Its domination of export market ended first to Sri Lanka in the nineties. Afterwards expot1 from Kenya and China surpassed Indian export. The increase in export from Sri Lanka, Kenya and China has pushed India to fourth position as exporter of tea at present. However, growing domestic consumption in India has largely been compensating the loss in export. Globally, Indian tea export finds place in traditional markets like the United Kingdom, Commonwealth of Independent States (C.LS) and Germany but the United Arab Emirates has also emerged as a major export market for Indian tea. While India's share of total export to Europe has declined over time, growth in export has taken place to the Middle East and Asian countries. Therefore, in this paper the growth and export patterns of major producing and exporting countries for a thirty-year period have been worked out along with a comparative study in relation to India. In addition, the destination-wise export pattern of Indian tea has also been analyzed. MATERIALSAND METHODS Long-term data on tea production and export of six major producing and exporting countries, viz. India, China, Sri Lanka, Kenya, Vietnam and Indonesia are considered for the study. The study period covers thirty-year data on production and export from 1981 to 20 I0 and secondary source of data are used for this purpose. The source of information is Tea Board of India publications viz. Tea Statistics and Tea Digest and Tea Board of India website (www.teaboard.gov.in). For analysis of destination-wise Indian export, a period of twenty five years from 1984 to 2008 is considered. 152
The data for both production and export are analyzed using appropriate statistical methodology. Regression analysis is used to fit appropriate statistical model to find out the growth trend for production and export in relation to time and necessary tests of significance are carried out along with goodness offit (R2) and variance ratio (F- test). To find out the quantum of percentage growth, fixed base "index numbers" are worked out using the initial year 1981 as the base year. Both trends and indices of global production and export as well as trends and indices for individual countries are worked out using the same methodology. Decade-wise and overall co-efficient of variation (C.V) for production and export are worked out to study the variability for individual countries and the world as a whole. annum respectively. This indicates that annual growth in production in China was double that of India. This high annual growth in production in China has made it the largest tea producer in the world overtaking India. The estimated annual growths of production in Vietnam and Sri Lanka were observed to be almost on a par producing 4.91 and 4.95 million kilograms respectively. As indicator of growth the yearly indices for production of six countries along with world production were worked out considering 1981 as the base. The indices are presented in Table 2. Table 2. Production Indices: Base Year = 1981 RESULTS AND DISCUSSIONS Production The relationship between time period and production is found out through regression models. The highly significant regression models with goodness of fit (R2) of each country and global trend are presented in Table 1 covering the period 1981 to 2010. Table 1. Production models (million kgs) Country India Sri Lanka Kenya China Vietnam Indonesia World Model P = 557.84 + 14.74X*** (± 0.50) P = 181.3 I + 4.95X*** (± 0.37) P = 89.41 + 9.26X*** (± 0.40) P = 241.02 + 29.23X*** (± 2.49) P = - 9.44 + 4.91 X*** (± 0.43) P = 94.82 + 7.55X*** - 0.21 X2 *** R2 (%) F 96.9 861.76*** 86.3 94.9 83.1 82.3 70.6 (± 0.97) (± 0.03) P = 1794.42 + 67. I IX *** 94.9 (± 2.94) P= Production X= Time period Note: (a) 177.09*** 524.29*** 137.94*** 129.86*** 521.93*** *: Significant at 5% level of productivity **: Significant at I% level of productivity ***: Significant at 0.1 % level of productivity (b) Figures within the brackets indicate standard errors (S.E.) of regression coefficients. These highly significant models indicate that the production of all the countries including total world production maintained linear growth from 1981 to 2010 except for Indonesia. This is due to decline in production in Indonesia in recent times. China achieved the highest annual growth which was followed by India. Quantity-wise, the estimated annual growths of tea production in China, India and the world were 29.23, 14.74 and 67.11 million kilograms per Year India Lans:a Kenya China VieUHIJ11 Indonesia World 1981 100.00 100.00 100.00 100.00 100.00 100.00 10000 1982 100.12 89.76 105.60 115.91 100.00 83.24 10325 1983 103.83 85.63 131.67 116.93 102.27 10439 108.47 1984114.25 99.56 127.74 120.00 100.00 114.6& 115.21 1985 117.16 102.46 161.74 126.38 140.91 120.10 122.33 1986 110.85 101.22 157.60 134.44 150.00 117.50 121.86 1987 118.79 102.12 171.33 148.32 159.09 114.43 125.35 1988 124.99 108.58 180.37 159.24 172.73 11732 13209 1989 122.87 98.95 198.59 15618 137.27 128.28 13038 1990 128.62 111.38 216.63 15769 14636 131.72 137.29 1991 134.67 114.94213.87 158.13 150.00 121.07 139.24 1992 130.76 85.12 206.81 163.45 154.55 132.21 132.54 1993 135.85 111.01 232.21 175.16 159.09 12916 13890 1994 134.44 115.90 230.28 171.82 163.64 117.78 136.72 1995 134.99 11726 26891 171.80 181.82 L3038 137.24 1996 13932 123.23 282.78 17325 181.82 150.87 144.55 1997144.74 132.02242.71 17909 190.91 13940 14915 1998156.08 133.56323.48 194.17 257.27 151.39 163.48 1999 147.48 135.21 273.61 197.33 295 15 146.10 158.79 2000 151.22 145.99 259.83 199.51 318.18 142.&0 159.92 2001 152.47 140.99 323.98 204.88 363.64 151.42 165.45 2002 149.72 147.80 315.70 217.63 400.00 147.18 163.30 2003 156.80 144.30 322.93 224.27 422.73 154.10 169.66 2004159.45 146.60356.95243.86 440.91 149.56 177.19 2005 168.91 15094355.73 272.95 606.14 141.81 184.81 2006 175.31 147.90 341.52 300.16 647.73 133.26 191.34 2007 176.14 144.95 406.43 332.85 673.95 124.55 202.91 2008 175.13 151.65 380.27 367.18 756.27 124.77 206.58 2009 174.81 137.89345.50396.68 700.00 12385210.17 2010172.56156.74438.76400.00 71364 117.24217.37 It is observed from Table 2 that the growth in production of varying degrees was maintained by all the countries over the last thirty-year period. The total global production more than doubled during this period (217%). Maximum growth in tea production during this period was observed for Vietnam. It achieved more than sevenfold increase in pit ~. lion during this period (713.64%). Vietnam was followed by Kenya and China with 438.76% and 400% increase in production respectively. The growth percentages of these three countries were found to be more than overall world growth in production. However, phenomenal growth of tea production in Vietnam was mainly due to low base year start where tea production was very low during the eighties. But, this high growth placed 153
Vietnam slightly ahead of Indonesia as tea producer. The production of other three countries under study, viz. India, Sri Lanka and Indonesia increased by 172.56%, 156.74% and I 17.24% respectively in the same period. The production increases of these three major tea producing countries were found to be lower than overall growth in world production. The high rate of growth in production in other countries, particularly in China, which had a lower base level production in 1981, pushed India to second slot as global tea producer. Export The indices of export of six countries under study and total global export are presented in Table 3 taking 1981 as the base year. Table 3. Export Indices: Base year = 1981 Year India Sri Lanka Kenya China Vietnam Indonesia World 1981 100.00 100.00 100.00 100.00 100.00 100.00 100.00 1982 78.73 99.08 105.51 115.06 105.56 8933 96.20 1983 86.42 86.31 133.08 135.99 111.11 96.27 101.96 1984 89.96 111.71 120.59 158.04 122.22 120.21 110.23 1985 88.71 10807 166.72 148.81 133.33 126.61 111.62 1986 85,45 11354 153.99 187.05 138.89 110.81 114.02 1987 83.68 109.82 178.45 189.49 144.44 126.89 114.31 1988 8330 120.18 180.09 215.60 150.00 13007 121.37 1989 88.15 111,45 215.77 222.44 166.89 160.97 131.81 1990 87.05 117.74 224.24 212.54 152.00 155.71 132.94 1991 84.11 11532232.13 201.01 111.33 154.67 126.32 1992 7252 97.25 220.18 190.86 144.11 170.14 119.14 1993 72.67 114.83 249.09 219.03 180.00 173.91 135.02 1994 62,46 122.66 243.57 195.37 177.78 119.17 120.73 1995 69.64 128.56 314.03 181.11 158.89 111.18 126.72 1996 67.03 127.76 322.93 184.48 172.22 142.48 130.54 1997 84.15 140.72 262.30 220.14 194.44 93.80 138.09 1998 87.19 145.12 348.27 236.41 369.00 9433 153.14 1999 79.47 143.83 319.64 217.04 404.89 137.31 148.15 2000 85.73 153.23 286.91 247.54 618.44 148.16 155.89 2001 75.68 157.26 341.29 271.47 758.00 139.94 162.95 2002 83.32 156.43 360.25 274.30 831.22 140.60 168.93 2003 71.99 158.94 356.04 282.68 665.56 123.74 164.08 2004 81.94 158.95 441.36 304.65 777.78 138.32 180.42 2005 82.51 163.42 460.51 311.58 976.89 143.54 183.84 2006 90.67 172.26 412.75 311.61 1168.00 133.79 185.12 2007 74.09 160.95454.45314.70 1232.56 117,40 184.41 2008 84.19 163,45 506.99 322.87 1155.56 135.01 193.91 2009 82.03 15307 452.84 329.40 1055.56 129.53 185.34 2010 80.12 163.32 583.13 328.82 1088.89 122.23 202.94 It is observed that global export volume had twofold increase (202.94%) during the last thirty-year period. Among all the six countries, only India declined in export. In particular, Indian tea export during mid-nineties showed a sharp decline but improved to some extent afterwards. Among all the countries, Vietnam showed maximum growth in expol1. In 2006, its export volume increased more than tenfold in comparison with 1981 and the trend was maintained up to 20 IO. Kenyan export increased almost six times during this period while Chinese export increased more than three times (328.82%). The growth of export of Vietnam, Kenya and China was found to be more than global export growth. Also, the export growths of Sri Lanka and Indonesia were found to be 163.32% and 122.23% respectively over 1981. Though the export growth of these two countries was found to be positive during last thirty years, their export growth was lower than global export growth. Among the major exporting countries, Kenya surpassed all other major tea exporting countries like India, China and Sri Lanka and retained its top position as the largest exporter of tea. The significant regression models of export for the countries under study as well as global trend are shown in Table 4. No significant trends were observed for export pattern of India and Indonesia and are not presented. Table 4. Export Models (million kgs) Country Sri Lanka Kenya China Vietnam World (b) Model R2 (%) E = 166.86 + 4.86X*** 88.1 (± 0.34) E = 55.09 + 10.67X*** 94.1 (± 0.51) E = 109.38 + 6.45X*** 89.1 (± 0.43) E = - 16.63 + 3.70X*** 80.8 (± 0.34) E = 768.89 + 29.38X *** 93.8 (± 1.42) E= Export X= Time period Note: (a) F 207.66*** 444.19*** 228.68*** 117.62*** 426.32*** *: Significant at 5% level ofproductivitv **: Significant at I% level of productivity ***: Significant at 0.1% level of productivity Figures within the brackets indicate standard errors (S.E.) of regression coefficients. From these highly significant models it can be inferred that continuous linear growth in export was maintained all throughout by all the four countries. The same trend was for global export scenario too. The global export market was growing at an estimated 29.38 million kilograms annually. Among the individual countries the growth of Kenyan export was observed to be the highest at an annual growth of I0.67 million kilograms. It was followed by China, Sri Lanka and Vietnam with 6.45, 4.86 and 3.70 million kilograms respectively. The comparison of production and export models indicates that the growth in export of Kenya surpassed its production growth. The quantity of growth in export of Sri Lanka was almost same as growth in production as observed from the above models. The indices for production and export indicate that the percentage growth of export was sufficiently higher than production growth for Kenya and Vietnam. 154
Variability in production In order to assess the variability and consistency for production and export, coefficient of variation (C.V) was worked out for each country and world as a whole. These are presented in Table 5. From Table 5 it is observed that among all the tea producing countries, minimum decadal co-efficients of variation were for India, Sri Lanka and Indonesia. This indicates lower amount of year to year variation in production in these three countries within the decade. The same pattern is observed for these three producing countries for the entire thirty-year period too. High levels of co-efficient of variation for Kenya, China and Vietnam indicate wide fluctuation in year to year production within the decades and also for the entire period from 1981 to 2010. But this large variation is largely related to high level of increase in production from year to year during the last thirty-year pidi and export Table 5. Coefficient of variation % (C.V): Production and Export Country 1981-1990 1991-2000 2001-2010 1981-2010 India 8.99(6.37)* 5.99(11.43) 6.27(6.79) 16.77(9.71) Sri Lanka 7.66(9.36) 13.92(13.29) 3.68(3.28) 18.18(18.83) Kenya 24.89(27.43) 13.48(15.86) 10.98(16.98) 35.92(43.93) China 15.64(25.76) 7.95(10.67) 25.23(7.10) 40.66(28.74) Vietnam 21.27(16.69) 30.12(63.39) 26.05(20.54) 71.48(89.67) Indonesia 12.52(19.57) 8.71(21.51) 14.76(6.68) 14.16(17.14) World 10.52(11.01) 7.62(9.74) 10.45(7.03) 21.39(21.80) *C.v. of export are presented in the parenthesis. The analysis of coefficient of variation for export of India shows minimum year to year variation which indicates low year to year fluctuation of export of Indian tea. Very high co-efficient of variation for export is observed for Vietnam and Kenya followed by China indicating high variability in export. However, the amount of variability for China's export has come down in the last decade. The highest variability in export for the entire thirty-year period is observed for Vietnam which is followed by Kenya and China. Therefore, it can be inferred from the above table that production and export of Indian tea are more consistent than other countries. However, high variability in both production and export for Kenya, China and Vietnam can be attributed to its high level of continual growth in both production and export. Destination-wise Indian tea export The Commonwealth ofindependent States (C.I.S) remains as the top destination ofindian tea followed by the United Kingdom all along. However, the amount of export to C.I.S countries has declined over time. In spite of decline, more than a quarter ofindian tea export found place in the C.I.S countries. The export to the United Kingdom also declined during this period and remains more or less static at present and consists of around 10% of India's total export. Other two major European importers of Indian tea, viz. Germany and Poland have also shown static trend. It is observed that the export to these four countries went down from 59% to 40% of total Indian export from 1984 to 2008. This indicates that India's market share in these countries is on decline. The county-wise Figs. 1 and 2..,. " ~ " 3D export pattern of Indian tea is shown in Fig. 1. Country-wise Tea Export (%): Europe Fig. 2. Country-wise Tea Export (%): Asia and Middle East The other major destinationsof Indian tea are the Middle East and Asian countries where the share of Indian export has improved. As of2008, 31% of Indian tea export went to four countries of this region, viz. Egypt, Iran, The United Arab Emirates (UAE) and Pakistan. The UAE is the largest importer of Indian tea in this region and the amount is growing as observed from Fig. 2. Export to Iran has started to rise again after steep fall during the nineties. The amount of export to Egypt and Pakistan has also shown improvement in recent times. This improvement in market share in this region has compensated India's loss in European market to some extent. 155
CONCLUSIONS I. The production trends of all countries and total world production have shown linear growth except for Indonesia. 2. The highest estimated annual growth in production is achieved by China which is almost double of India's annual production growth at 29 million kilograms. This high annual growth has contributed China to become the largest producer of tea in the world overtaking India. 3. Annual global production and export growth are estimated at 67 and 29 million kilograms respectively. 4. Global tea production and export more than doubled from 1981 to 20 I O. The percentage production and export growth in Vietnam, Kenya and China is found to be more than global growth. 5. India is the only major tea producer which has shown decline in export. 6. For both production and export, India has shown minimum variability. 7. The percentage share of Indian export to European countries shows a decline, but is increasing in Asian and the Middle Eastern countries. 156