Chinese tea takes on global market(2)

The vast majority of Chinese tea exports are sold at wholesale prices as raw materials used for blending. In 2014, over 80 percent of exports were lowgrade green tea, with Africa, Europe and Russia being the main markets.

Wang Jianrong, director of China National Tea Museum, says international interest in Chinese tea is generally on the up but low profitability has hindered Chinese tea exports.

"The average export price of Chinese tea was around $4 per kilo last year, which was unprofitable or even loss-making for producers," Wang says.

Rising costs in China have put its producers at a disadvantage against competitors. In 2013, China was the second-biggest exporter at 322,600 tons behind Kenya's 494,400 tons and marginally ahead of Sri Lanka's 319,600 tons, but is expected to drop to third place when Sri Lanka releases its export figures for 2014.

A problem for Chinese producers, according to Wu Jing, editor-in-chief of tea portal website chayu.com, is the difference between the domestic and international tea markets.

"The domestic market values low-production, handmade teas but the global tea market prefers mass-produced teas that are standardized in quality and taste," he says. "Export teas are grown specifically for that purpose and not consumed domestically."

"More should be done to market higher quality green and fermented teas, which China is renowned for abroad," Wang says.

However, experts view reducing volumes and increasing prices of exports as the start of a shift in exporting higherend teas.

In Canada, the tea import market is expected to grow 20 percent this year from its current size of $1.05 billion, said Erick Smithe, director of sales at premium Pu'er tea retailer 6 Mountain Teas.

Based in Vancouver, with its large Chinese community, 6 Mountain Teas expects 100 percent growth in each of the next five years from the 10 tons anticipated in 2015, Smithe said.

Although export figures may continue to trough in the short term, Wang says: "The future of Chinese tea exports will be bright if we continue to penetrate overseas markets with tea culture, something that is not reflected in trade figures."