Exploring the World of Tea: Origin, Processing Methods, Types, and Trade

Tea is a beverage consumed globally and has become an essential part of daily life. It is produced in various forms and has a rich history dating back to ancient times. In this article, we explore the world of tea and delve into its origin, processing methods, and different types. We also provide an overview of the global tea production and trade, highlighting the different regions and international standards. From black to green and oolong tea, to tisanes or infusions made with herbs and berries, the article covers the nuances and differences of each type. Join us as we embark on a journey through the world of tea.

Exploring the World of Tea

Tea has become an essential part of our daily lives and is consumed in various forms worldwide. But where does it come from, and what makes it so unique? In this article, we’ll delve into the world of tea and explore its origin, processing methods, and different varieties.

The Origin of Tea: Camellia Sinensis

All modern tea comes from Camellia sinensis, a tree native to China and India. There are three main varieties of Camellia sinensis used in commercial tea trade: China, Assam, and Cambodia. The China variety is a hardy bush with a lifespan of one hundred years, while the Assam and Cambodia varieties are tall single-stem trees with a commercial life of forty years. Tea trees are usually kept short through frequent trimming for easy plucking. The best teas are grown at altitudes between 1,000 and 2,000 meters.

Processing Methods for Different Types of Tea

Green leaf, the farm product, is sent for processing at tea factories and becomes made tea—also known as black tea or dry tea—the internationally traded commodity. The ratio of green leaf to made tea is about five to one, meaning five kilograms of green leaf are required to make one kilogram of made tea. Three processing methods are used to convert green leaf to three types of made tea: black, green, and oolong.

Black Tea

To make black tea, tea leaves are spread on racks to dry and then put through a machine that breaks up the leaf cells, frees the oils, and ejects a twisted lump of leaves. These are sent to a fermenting room, where they are spread thinly and left to absorb oxygen. The leaves are then exposed to a continuous blast of hot dry air for fifteen to thirty minutes, which turns them black. Black tea accounts for three-quarters of global tea output and is supplied mostly by East African and South Asian countries.

Green Tea

Green tea has a less processed flavor than black tea. The leaves are steamed and heated immediately after plucking. Because the leaves are dried without going through fermentation, they remain green. After being separated by grade, the leaves are packed in chests lined with aluminum foil. Green tea, which accounts for a quarter of global tea output, is supplied primarily by China and to a lesser degree by Japan, Vietnam, and Indonesia.

Oolong Tea

Oolong tea is traditionally prepared in South China and Taiwan from a special form of the China tea plant—the chesima. It has large leaves and a distinct flavor. Preparation is similar to black tea but with a much shorter fermentation process. Oolong teas, which account for only a small fraction of the global market, are often scented with flowers.

Other Types of Tea

While people often refer to almost anything steeped in hot water as “tea,” only Camellia sinensis is properly given this designation. Teas made with herbs and berries are more properly called tisanes or infusions. Leaves from several other plants are consumed like tea. For example, Paraguay tea, often called yerba maté, is made from the leaves of a species of holly found primarily in Argentina, Brazil, and Paraguay. The Indians of North Carolina used to prepare a tea called yaupon from the leaves of another holly-like tree. Trinidad tea is made from the leaves of the pimento or allspice tree.

Tea Production and Trade: A Global Overview

Tea is one of the world’s most popular beverages and is produced in both tropical and temperate regions. In this article, we will provide an overview of global tea production and trade.

Production Overview

Tea is grown at high altitudes and typically does not compete with food or other cash crops. Asia accounts for about three-quarters of global tea production, followed by Africa, and several Middle Eastern and Latin American countries. During 2002–2005, China and India produced more than half of the world’s tea, followed by Sri Lanka and Kenya. Global tea production during this period was 3.25 million tons.

Smallholders and Tea Estates

Tea is produced by both smallholders and estates. Tea estates are owned by large companies producing large quantities of tea, normally exceeding 1,000 tons of made tea (sometimes as much as 10,000 tons). These estates employ both permanent and seasonal laborers, with the permanent laborers residing in living quarters within the estate and receiving other benefits, such as basic health care and schooling for their children. The conditions for employment on tea estates are considered very good, and permanent workers are often considered to be “privileged” compared to their seasonal counterparts.

International Standards

Although wages are low compared to Western standards (about $2 per day), they are considered high enough for many developing countries. Conditions of employment are also considered good because estates, often owned by multinational companies, must adhere to international standards and scrutiny concerning wages, hours, and conditions of employment. In addition to the International Labor Organization, numerous international and local non-governmental organizations and advocacy groups (such as the International Labor Rights Fund) monitor employment conditions.

Trade Overview

Global tea production from 2000 to 2004 exceeded three million tons, valued between $4 and $5 billion annually. Growth in tea production, as high as 4 percent in the 1970s and 3 percent in the 1980s, slowed to 1.6 percent in the 1990s. Almost half of global tea production is traded internationally. Sri Lanka, China, Kenya, and India account for almost three-quarters of world exports. The United Kingdom used to be the largest tea importer, but by the early 2000s, it accounted for only about 10 percent. The dominant tea importer is Russia, which accounted for 12 percent of world imports in 2005.

Understanding Tea Prices and Auctions

Tea is a widely traded commodity and one of the most consumed beverages globally. However, unlike most primary commodities whose prices are determined in futures exchanges, tea prices are established at auctions located in tea-producing countries. In this article, we explore how tea prices are determined, the auction system, and the impact of global trade on the tea market.

Tea Auctions and Prices

Tea auctions, which trade about one-third of global tea output, are located in tea-producing countries. India, for example, has six auctions, but the two largest are in Colombo, Sri Lanka, and Mombasa, Kenya. Auctions in consumer countries, which operated during the 1970s and 1980s, have been less successful, with the exception of the London auction, once the world’s most influential.

Until the early 1970s, London held the world’s dominant tea auction. London’s last auction took place on June 29, 1998, bringing to a close a 319-year-old tradition. Kenya’s tea auction system began in November 1956 in Nairobi under the auspices of the East African Tea Trade Association. It initially traded small quantities of secondary-grade teas, but following increased interest from producers and buyers, the auction moved to Mombasa in 1969 and started trading main grades of tea.

The Mombasa auction has become the world’s dominant tea auction, and its prices (especially Mombasa’s) are considered the world price indicators. This is likely due to the change in transactions from local currency to the US dollar, which occurred in October 1992, following the relaxation of foreign-exchange controls. Unlike other commodity markets, the global tea market is not subject to the types of trade impediments faced by other commodity markets such as cotton.

Tea Price Stabilization Schemes

There have been no United Nations–backed international price stabilization schemes in the tea market in the post-World War II period. However, there have been two voluntary supply-restriction schemes. The first, running from 1920 to 1921, grew out of the sharp price decline of 1920 and was led by India and Sri Lanka (then Ceylon). A second restriction went into effect in 1930, led by the same countries and for the same reason.

A five-year International Tea Agreement was launched in April 1933 to support tea prices through export quotas, backed by India, Indonesia, and Sri Lanka. The agreement occurred in response to the collapse of tea prices during the Great Depression—they declined by 70 percent between 1927 and 1932.

The Future of the Global Tea Industry

Tea is one of the most popular beverages globally, with most of its consumption concentrated in low- and middle-income countries. The growth of the global tea industry is dependent on several factors, including income growth, competing industries, and consumer preferences.

Factors Affecting Tea Demand and Supply

According to the UN Food and Agriculture Organization (FAO), the long-term outlook for tea depends mainly on income growth in low- and middle-income countries. The FAO estimated that the growth in global tea demand for the 2000–2010 decade would not exceed 1 percent, which is similar to the rate of demand growth in the 1990s. The majority of demand growth is expected to come from increased imports by countries of the former Soviet Union.

On the supply side, China, Kenya, and Vietnam are expected to increase their exports. Tea competes with other beverages such as coffee and soft drinks, such as Coca-Cola, and hence tea consumption is also dependent on the growth of these industries. However, growth is also expected to take place in niche markets, such as organic tea and iced tea, which are mostly consumed in high-income countries.

Consumer Preferences

Consumers are becoming more health-conscious, and this could increase the consumption of tea, especially green tea. Green tea undergoes less processing at tea factories, and is hence considered a more “natural” drink. As consumers become more aware of the health benefits associated with drinking tea, such as the presence of antioxidants, there is likely to be an increase in demand for tea.

Top 10 Tea-Producing Countries in the World

Tea is the most widely consumed beverage in the world, after water, and is grown in over 50 countries. The global tea industry is worth billions of dollars annually, and with increasing demand for health and wellness products, the industry is expected to continue to grow. Here are the top 10 tea-producing countries in the world:

10. Argentina – 70,000 Tonnes

While South America is better known for coffee production, Argentina produces just under 90,000 tonnes of tea annually. The country cultivates black tea varieties of Indian origin. Tea was introduced in the 1920s when the Argentine government encouraged farmers to experiment with different crops. The most popular tea consumed in Argentina is Yerba Mate.

9. Iran – 84,000 Tonnes

Iran is located in the Middle East and produces just under 84,000 tonnes of tea, primarily in the Caspian sea region of Gilan. Tea was first introduced as a drink to this region in the 15th century, due to trade along the Silk Road, and became popular quickly. The crop wasn’t grown in Iran until 1899 when Prince Mohammad Mirza smuggled tea bushes from India into the city of Lahijan and began cultivating the crop.

8. Japan – 89,000 Tonnes

Japan produces around 89,000 tonnes of tea annually, mostly green tea, in the regions of Shizuoka, Kagoshima, and Uji. Tea has enormous cultural significance in Japan and is central to tea ceremonies. Tea may have been introduced to Japan as early as the 6th century by Buddhist monks, and the drink quickly became aligned with religious ceremonies.

7. Vietnam – 117,000 Tonnes

Vietnam produces around 117,000 tonnes of tea annually, with the French introducing the crop to the country during their period of colonial rule. The Yen Bai province in North Vietnam cultivates a wide variety of tea leaves, including green, black, and white, as well as specialty teas flavored with flowers, including lotus tea.

6. Indonesia – 157,000 Tonnes

Indonesia produces 157,000 tonnes of tea annually, with the crop being introduced in the 1700s by the Dutch East India Company during colonial rule. The Indonesian climate allows for mostly black and green teas from Indian Assam varieties to thrive. Indonesian teas are renowned for their high levels of catechin, a natural phenol and antioxidant.

5. Turkey – 175,000 Tonnes

Turkey grows 175,000 tonnes of tea annually, with Riza, a tea from the region of the same name found on the Black Sea coast, being their specialty. Despite a relatively modest harvest, Turkey drinks more tea per person than any other nation on the planet.

4. Sri Lanka – 300,000 Tonnes

Sri Lanka, also known as Ceylon, produces just under 300,000 tonnes of tea annually, around 17% of the world’s tea crop grown in the central mountains. Sought-after teas like Dimbula, Kenilworth, and Uva are cultivated here.

3. Kenya – 305,000 Tonnes

Kenya is the top tea-producing country in Africa, harvesting just under 305,000 tonnes of tea each year. Kenya claims the accolade of the world’s top black tea-producing country, with teas grown in the Kericho region, the Nyambene Hills, and Nandi. Tea was first introduced to Kenya in 1903 and fully commercialized by 1924.

2. India – 900,000 Tonnes

India is a prominent tea-producing country, with an annual production of 900,000 tonnes, ranking second in the world. The tea is grown in large quantities across the regions of Darjeeling, Nilgiri, and Assam. Interestingly, the commercial introduction of tea production in India was initiated by the British in 1824 as a measure to rival China’s monopoly in tea production. This venture turned out to be a huge success, as India became the world’s largest tea producer for over a century. However, China regained its top spot in the world rankings in the early 2000s.

1. China – 2,400,000 Tonnes

China is considered the spiritual home of the humble cuppa and it comes as no surprise that it tops the list as the world’s largest tea producing country, weighing in at 2.4 million tonnes. China produces roughly 40% of the world’s tea, which is primarily grown in the provinces of Yunnan, Guangdong, and Zhejiang. Not only is it the biggest exporter and grower of tea, but China is also known for producing some of the best teas, including Lapsang Souchong, Keemun, and Green Gunpowder.