International black tea prices soar to two-and-a-half year highs

On August 8, the British "Financial Times" reported that due to weather factors, some of the most important tea producing countries had affected the supply, and the price of black tea tea jumped to a two-and-a-half year high.

The rise of high-end varieties is particularly fierce. The British "Financial Times" said that since the beginning of the year, the wholesale price of the highest grade black tea (BP1) has soared by 41%. In July, it exceeded 4 US dollars per kilogram. This level had previously only appeared once in late 2009 when the price reached $5.45.

Will retailers pass on costs?

Unlike coffee, black tea leaves are not traded on futures exchanges. Instead, they are traded at a weekly auction held in Mombasa, Kenya, the largest port in East Africa.

British "Financial Times" said that dry weather, less rain and frost affected the largest tea exporter Kenya's tea production. According to the Kenya Tea Management Committee, in the first half of this year, Kenya's black tea production was 158,000 tons, a decrease of 11.3% from 2011.

The other two major black tea tea exporters, India and Sri Lanka, have also lowered their production forecasts due to insufficient rainfall. Ju Yongsong, secretary general of the FAO's FAO Inter-governmental Tea Group, judged that the production of black tea in India and Sri Lanka may be reduced by 5% to 10% from last year.

Traders expect that, in view of the increase in inventories of the largest black tea-importing countries in recent months—Russia, the United Kingdom, Pakistan, and the Middle East—black tea tea prices will be briefly reconciled and will rise again in the winter.

“(Black tea leaf price increases) will have some impact on retail prices, but in the retail sector, the competition between various beverages is quite fierce.” Chang Yusong told the British Financial Times that retailers are unlikely to pass on all the gains to consumers. By.

The Financial Times quoted analysts as saying that the drinkers of Cairo Sweet Tea, London Milk Tea and Los Angeles Ice Tea will feel the impact of the rising price of black tea. Tea drinkers in poorer countries such as Afghanistan and Pakistan may be the most affected, “where retailers’ profit margins are lower than in the West”.

China's Conducting Effect As far as its influence on China is concerned, Zheng Yujie, a researcher in the investment, farming, forestry, animal husbandry and fishery research firm, believes that after China's accession to the WTO, tea is an open commodity. If the price of international black tea leaves continues to soar, it will be transmitted to the Chinese market.

Some experts believe that unlike corn and soybeans that are controlled by humans, China is still one of the major exporters of tea. The annual output reaches 1.6 million tons, of which only 300,000 tons are exported, and even if price transmission may occur, this transmission effect is minimal. . Sun Yu, deputy secretary-general of the China Food, Animal and Livestock Import and Export Chamber of Commerce, is the one who holds such views.

With regard to the soaring price of domestic black tea in recent years, many people think that there are speculations.

“The Wuyi Mountain black tea in Fujian has already sold for 60,000 yuan a pound, which should be the price of fired, it is difficult to have real needs.” Ye Qinzhong said so. Zheng Yujie holds similar views. Zheng Yujie believes that tea is a strong cyclical product, and speculators will wait to buy cheaply in the off-season and sell it at high prices during the peak season. The weather factor will further stimulate the rise. “This year, the continuous drought in Yunnan triggered a rise in Puerh tea prices, driving the prices of tea such as Tieguanyin, Dahongpao and black tea.”

Domestic tea prices “doubled in 5 years”

Sun Yu also talked about the rise in domestic tea prices in recent years. "It is indeed rising, mainly concentrated in the famous tea." Sun Yu said.

Guo Yi, president of Guangxi Tea Association, told Xinhua News Agency before that in the second half of 2006, all domestic tea products, including green tea, black tea and black tea, all experienced over 20% increase in annual prices. Longjing tea, astronomical black tea...appeared on media of all ages almost overnight. He said: "Even if we eliminate the hype factor, the average price of tea will have doubled in five years."

However, tea companies do not appear to have benefited from this upswing. Ye Qinzhong, sales manager of Wucai Early Tea Development Co., Ltd. in Yongjia County, Zhejiang Province, told the Morning Post reporter yesterday that tea has indeed risen in the past two years, and the annual increase of green tea is about 10%, but this still cannot cover the increase in costs. "A three-year-old mining worker had about 40 pieces of working capital a day. He has been rising for two years. First 60, and then 80. This year it has risen to 90. One kilogram of tea is just the cost of mining is close to 180 yuan. To manage food and shelter, management costs, planting costs, etc. have not yet been counted." Ye Qinzhong said that the price of the company's first-class green tea per kilogram is 700 yuan, up 200 yuan from the previous two years, far behind the rise in costs .

Tea farmers and tea companies complained that tea growers, tea traders and tea companies complained that real profits were taken away from the circulation sector.

Wu Weiqi, a tea merchant who supplies the large supermarkets all the time, once calculated such an account with Xinhua News Agency: The admission fees for supermarkets rose by 20% every year for the past three years. The number of stores in more than 30 medium-sized supermarkets, admission fee of 20,000 yuan. The number of deduction points in supermarket channels rose to 35%; many supermarkets will also charge suppliers such as information entry management fees, new cabinet fees, festival fees, etc., plus shipping, seasonal replacement, etc. "The profit dropped by 50%. The remaining 30% will have to pay staff costs and other operating expenses. The profits that the company finally got were almost gone.

Taking 1 kg of Maofeng tea as an example, the price of tea is roughly composed of: 20% for fresh leaf acquisition costs, 15% for processing, sorting, packaging, logistics, 50% for supermarkets, etc., 7% for taxes, and gross profit for enterprises. 8%.