14 May 2008Boosting demand for tea is crucial to ensure price stability and returns to developing country producers, according to new report by the United Nations Food and Agriculture Organization (FAO). Boosting demand for tea is crucial to ensure price stability and returns to developing country producers, according to new report by the United Nations Food and Agriculture Organization (FAO). “Expanding consumption in producing countries could ease supply pressure at the world level and improve tea prices in the long run,” said the study, prepared for the Intergovernmental Group on Tea whose three-day meeting kicks off today in Hangzhou, China. Global tea production has continued to surge, rising 3 per cent in 2006, mainly due to record crops in China, Viet Nam and India. Meanwhile, demand has not matched supply, with consumption only increasing 1 per cent, marking a slowdown from the 2.7 per cent growth rate from the previous decade. Despite the vigourous economic growth in major tea producing countries, their per capita consumption lags behind. While Russians consume 1.26 kg and the British 2.2 kg annually, Indians take in 0.65 kg and Chinese only 0.53 kg per year. The FAO report also stressed that enforcing minimum quality standards for tea – though reaching agreement on such benchmarks is complicated – will spur demand.

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