From China To India: A Look At The Largest Tea Markets In The World

Tea boasts a rich history that spans centuries, starting from its ancient origins in China to its current widespread popularity in various forms. It continues to captivate and please millions of individuals worldwide due to its diverse range of flavors, aromas, and health benefits, which can differ greatly depending on the tea type. In this article, we embark on an enjoyable exploration of the tea world. So, grab a cup of your favourite brew, and let's delve into this fragrant and tasty journey.

Tea, the most consumed drink after water, has nearly 3,000 varieties. According to the United Nations' Food and Agriculture Organization, global tea production experienced a rise in 2021, reaching an estimated 6.5 million tonnes, compared to 6.3 million tonnes in 2020. The global tea market size reached US$ 247.20 billion in 2023 and is further expected to reach $266.7 billion by 2025, with an expected annual growth of 4.22% (CAGR 2023-2025), as per Statista.

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Tea, now a beverage steeped in tradition and cherished by cultures worldwide, holds a prominent place in the global market. As tea consumption continues to soar, understanding the dynamics of the largest tea markets becomes crucial.

China: The Reigning Champion Of Tea Consumption

China, where tea originated over 4,000 years ago, stands as the largest tea market in the world. With tea-drinking culture deeply ingrained in its society, China consumed a staggering 1.9 million metric tons of tea in 2020, accounting for nearly 30% of global tea consumption, as per International Tea Committee. Also, China, in 2022, produced approximately 3.35 million metric tons of tea, making up nearly half of the world's total tea production.

Green tea, oolong tea, and Pu-erh tea hold significant popularity among Chinese consumers. Furthermore, In the year 2022, China's tea exports amounted to approximately 375 thousand metric tons, valued at nearly 2.1 billion U.S. dollars, constituting at least one-fourth of the global tea supply.

India: Steeped In Richness And Potential

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India, renowned for its diverse tea offerings, secures the second spot in the global tea market, and Kenya, Sri Lanka, and Indonesia follow. In 2020, India consumed approximately 1.08 million metric tons of tea, representing around 16% of global tea consumption, as per International Tea Committee. Further, India's total tea production for the year 2020-21 was 1.283 million metric tons. In 2021-22, Assam and West Bengal produced the vast bulk of India's tea, accounting for over 83% of the country's total annual production.

Apart from Nilgiris in Tamil Nadu, Assam has two main tea-growing regions, and they are the Assam Valley and Cachar. The three most important areas for producing tea in West Bengal are the Dooars, Terai, and Darjeeling. About 17% of India's overall production comes from the southern region, specifically the states of Tamil Nadu, Kerala, and Karnataka, as per the India Brand Equity Foundation (IBEF). India is also one of the world's top five tea exporters, accounting for around 10% of all tea shipped abroad.

When asked about how India can increase the production of tea, Food Policy Analyst Devinder Sharma says, "As of now, I don't believe we necessarily require new technology, as it tends to raise costs and primarily benefits the selling companies. Instead, I propose that we shift our focus from quantity to quality by promoting organic farming and effectively branding our existing produce. This approach will ensure that we highlight the value of our products. For example, in India, we can enhance the branding of tea by emphasizing its unique regional flavors and traditional cultivation methods."

Future Potential: Unveiling Emerging Tea Markets

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While China and India remain the powerhouses of tea, several emerging markets exhibit tremendous growth potential:

United States: The American tea market has witnessed a remarkable surge in recent years, with a consumption volume of 234,000 metric tons in 2020. The market's focus on health and wellness, along with a growing preference for specialty and herbal teas, positions it as a promising contender.

Russia: Tea holds a cherished place in Russian culture, making it one of the largest tea-consuming nations globally. In 2020, Russia consumed approximately 183,000 metric tons of tea. With a preference for strong black teas and an emerging interest in premium and specialty blends, Russia presents significant opportunities for tea producers.

Comparing the Indian and Chinese Tea Markets

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While both India and China dominate the tea market, they exhibit distinct characteristics:

Production: China reigns as the world's leading tea producer, cultivating an expansive array of teas across its vast territory. In 2020, China produced 2.74 million metric tons of tea. In comparison, India produced nearly 1.33 million metric tons in the same year.

Consumption Patterns: Chinese consumers favor green and oolong teas, valuing the traditional tea-drinking experience and the cultural significance attached to tea ceremonies. Indian consumers, on the other hand, lean towards black teas, often enjoying them with milk and spices as part of the popular chai tradition.

Export Focus: China exports significant volumes of tea globally, catering to the growing demand for Chinese tea culture and specialty teas like Pu-erh and Longjing. India's tea exports have gained momentum. India's unique tea varieties, such as Darjeeling and Assam teas, have garnered attention and appreciation from tea enthusiasts worldwide.

Shedding light on how India can become a better competitor, Devinder Sharma, says, "There are several factors to consider, such as revitalizing existing plantations and establishing new ones, particularly since some plantations are quite old. It is also crucial to improve the conditions for employees and enhance their wages by addressing issues like hunger and livelihood concerns faced by tea plantation workers."

He adds, "Moreover, a significant challenge lies in creating a strong brand identity. India possesses delightful variations of masala chai, and to capture the attention of foreign customers, we need to make the branding more enticing, showcasing the unique and irresistible qualities of our tea offerings. By leveraging its rich tea heritage and diverse flavor profiles, India can position itself exceptionally well in the tea market."

Conclusion

Tea has become a cherished drink in cultures around the globe thanks to its extensive variety and enchanting flavors. With black tea's boldness, green tea's refreshing qualities, oolong tea's harmonious balance, and herbal teas' soothing infusion, each type offers a distinct and captivating experience.

As tea's popularity continues to surge, the largest tea markets play a pivotal role in shaping the industry's trajectory. China's dominance in tea consumption and production is complemented by India's rich tea heritage and growing export presence. As emerging markets like the United States and Russia exhibit significant growth potential, the global tea landscape promises to evolve further, offering exciting opportunities for tea producers and connoisseurs alike.