Business | Emiratisation

UAE emerges world’s top tea re-exporter

Sri Lanka is the UAE’s top supplier of tea

  • WAM
  • Published: 17:32 October 29, 2012
  • Gulf News

Tea
  • Image Credit: Supplied picture

Abu Dhabi: The UAE is a global hub in the tea re-export market, according to a report issued on Monday by The Ministry of Foreign Trade to mark the International Coffee and Tea Festival, which is scheduled to begin in Dubai on Tuesday.

The study found that over the past five years, the UAE has become the world’s foremost re-exporter of tea, with a 60 per cent share of the market, with a share that was valued at around $48 million (Dh176.2 million) in 2011.

The study, which was conducted by economic advisor, Dr Abdul Hamid Radwan, under the supervision of Dr Mattar Ahmad, head of the Analysis and Trade Information Department, showed that the UAE is among the world’s top five tea importers, occupying second place from 2007 — 2011, with the exception of 2009, when it ranked in third place after the UK.

Moreover, it pointed out that UAE tea imports have risen by around 50 per cent during the same period, from $324 million in 2007, to $485 million in 2011, and that the country’s share of total global tea imports has also grown from 8.3 per cent in 2007 to 9.4 per cent in 2011.

The study identified Sri Lanka as the UAE’s top supplier of tea, providing around 20 per cent of its tea imports from 2010 — 2011. The South Asian island state was followed by India, with an 8 per cent share of the UAE’s tea imports during the same period. However, both countries’ combined share declined in favour of other world countries from 30 per cent in 2010 to 26 per cent in 2011.

It also revealed that the UAE’s tea exports were around $5.7 million in 2011 — up by 68 per cent from 2010 — while re-exports of the commodity decreased by 14 per cent during the same period, negatively affecting total exports with a 10 per cent decline.

The study showed that nearly 85 per cent of all UAE re-exports were to two main destinations, 81 per cent going to Iran and 4 per cent to Oman in 2011, calling for the exploration of new markets to maintain the country’s prominent standing in the tea trade.

The study also revealed that the global tea imports were $5.704 billion in 2011, up by 37 per cent from 2010, with Russia being the foremost importer of tea during 2007 — 2011, importing $625 million of tea in 2011 (up by 11 per cent from 2010).

The UAE came in the second place during the same period with the exception of 2009 when it came in third place after the UK.

Global tea exports in 2011 were around $6.349 billion, up by 3 per cent from 2010, registering however a 5 per cent decrease in quantity.

From 2007 to 2011, Sri Lanka was the world’s foremost tea exporter, with a 22 per cent share of the commodity’s global exports, followed by Kenya, with an 18 per cent share.

The world’s 5 top tea exporters together hold a 70 per cent share of the world’s tea export market, which reflects an export concentration vulnerability as global supplies could be adversely affected in the event of the occurrence of droughts and other production affecting phenomenon.

The study added that the global tea re-exports were $99 million in 2011, down by 12 per cent in 2010, with a 15 per cent decline in quantity during the same period. This may be attributed to the international economic ramifications of the EU crisis.

It also showed that global re-exports of coffee were worth $349 million in 2011, with the USA holding the biggest share in this market at $238 million, while the UAE came in fifth place in this regard with $6.2 million in coffee re-exports at a growth rate of 32 per cent from 2010 — 2011.

The study pointed out that the tea, in its raw form, requires storage time and packaging services, creating a role to be played by a number of countries as value adding intermediaries between production and consumption centres.

The UAE, through the Dubai Multi-Commodities Centre (DMCC) — established in 2005 near Dubai’s ports — provides global tea producers and importers with all sorts of tea trade enabling facilitations that include a large tea storage facility that is also equipped with the means to mix and package the commodity. It is also home to many tea company offices.

The facility also has many other divisions such as the “tasting unit”, which categorises tea arriving at the UAE from 35 Asian and African countries. The centre is considered one of the world’s most important tea re-export industry hubs, storing the tea shipments of many world countries.

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