China's tea growers going organic in an attempt to increase exports
BEIJING - Steeped in rich history, the misty and verdant mountains of Wuyi are set to sport an organic hue that not only promises to bring in the tourists, but also keep the cash registers ringing for tea growers.
Tea has been one of the most important Chinese exports for several years now, with the Wuyi blends being the cup of choice among connoisseurs of Chinese tea.
Black tea is one of the major components of the global trade and accounted for 66 percent of the 4.06 million tons of tea produced in 2010, according to the latest figures from the China Tea Marketing Association. Exports of black tea stood at 1.3 million tons in 2010 and accounted for nearly 75 percent of global tea exports. Nearly 44 percent, or 40,000 tons, of the black tea produced in China comes from Fujian, especially from Wuyi Mountain.
In spite of these impressive figures, black tea exports from China currently account for less than 5 percent of the global total. Stiff competition from other growing nations in terms of pricing and stringent quality controls imposed by importing nations have made life difficult for many Chinese tea growers. However, things are set to look up again as consumers across the world become more health conscious and increasingly turn to products with more natural ingredients.
Wuyishan, a county-level city in Nanping, northwest of Fujian province and named after Wuyi Mountain, is the cradle of most black teas in the world.
The city has 592 companies and 958 family workshops engaged in tea production. Many of them have already turned to organic cultivation with an eye on the future.
Organic tea
Tribute Tea Co was one of the first local companies to pioneer the production of organic tea in Wuyishan.
Yu Zeqin, general manager of the company, said that Wuyi Mountain offers conditions that are particularly suitable for cultivation of organic tea.
"The temperature difference between day and night in the mountain range is huge, which makes tea trees less vulnerable to diseases and pests. Hence they need fewer pesticides and fertilizers," Yu said.
Established in 2007, the company has 35 hectares of organic tea gardens n Wuyi Mountain, with 90 percent of its employees being tea growers.
"Tea is a special commodity. Its price and profit varies based on the quality," said Yu, adding that a higher level of quality would help growers gain a greater say in product pricing. Some tea growers have seen their revenues grow fivefold after obtaining organic certification, he says.
The local government has also taken several steps to encourage organic planting and invested 22.1 million yuan ($3.5 million) to build an organic plantation of 2,800 hectares in the city.
According to the city's 12th Five-Year Plan (2011-2015), Wuyishan will build a tea technology center with investment of 600 million yuan.
Over the next five to 10 years, Wuyishan plans to become the provincial tea production base, with an annual output worth 200 million yuan by 2015.
The shift toward organic tea production in Wuyishan was prompted by low yields and declining productivity.
Spread over 2,798 square kilometers (sq km), Wuyishan has just 87.4 sq km of tea gardens and produced 9,770 tons of tea in 2010. In contrast, Sri Lanka, with 2,500 sq km of plantations, produced 399,000 tons of raw tea in the same year.
"Every year we receive large export orders, but we cannot cater to them because of limited labor and productivity," said Kang Liyun, marketing manager of Lapsang Tea Industry Co.
Established in 1998, Kang's company has 130 employees and produces 600 tons of tea every year.
The company ships about 100 tons of unprocessed tea to the European Union (EU), the United States, and some Asian countries such as Japan and South Korea. It also has two processing factories, spread over an area of 4,500 sq m. Apart from the plantations it owns in Hubei and Jiangxi provinces, it also has alliances with local tea gardens and processing factories.
To further increase productivity, the company has sought 20,000 sq m of land from the local government to build a new processing facility. The total investment in the new facility is expected to be about 60 million yuan and, if permitted, would increase production by three to four times.
"We plan to build a modern factory to help standardize our processing and shorten the production cycle."
At the same time exporters are also facing higher risks as tea-consuming countries in the West raise their testing standards.
Last year, the European Commission issued an order to impose special controls on tea imports from China.
Stricter examination
The directive called for stricter examination of Chinese tea exports to the EU, including entry into the bloc through designated ports, and also stipulated that 10 percent of the goods should undergo onsite inspection and sampling for pesticide residues and other items.
Shen Qing, chief executive of King Building, a Beijing-based company that specializes in industry planning and marketing, said that most of the directives are technical barriers.
He said that Sri Lanka exports about $1.2 billion worth of tea every year. Most of its products meet the standards required by most consuming countries.
"China should strive to have stricter quality control in its tea-garden management and production system. It may reduce productivity to some extent temporarily, but the quality may increase by a large degree, and so will the overseas sales."
The export price is another issue that concerns domestic producers. A report from the China Tea Marketing Association showed that the average price of Chinese tea in the world market is about $2 a kilogram (kg), 40 percent lower than that of tea from India and 60 percent lower than from Sri Lanka.
In the domestic market, the average price of black tea is about 150 yuan a kg. One kg of Jinjunmei, a leading variety of black tea, is priced at anything from 7,200 yuan to more than 20,000 yuan.
Wei Saiming, general manager of Fujian Tea Import and Export Co, said that stricter testing in the EU may increase export costs to some extent, but the real hindrance to the expansion of exports is the low profit in overseas markets because of inadequate pricing.
"Right now, the domestic market, with its high revenue and low market threshold, is more lucrative for tea producers. On the other hand, to satisfy the strict requirements of the EU, producers have to apply a series of quality-control measures, from the use of pesticides to the final processing method. It all pushes up the costs and management risks for tea producers."
New proposal
In October 2011, Michael Bunston, chairman of the International Tea Industry Committee, along with tea experts from Canada and the United Kingdom, introduced a Wuyi Mountain proposal at the International Tea Conference & Tea Products Trade Fair 2011.
The proposal aimed to reposition Wuyi Mountain tea in the global industry and find a way to increase its market share and build up its reputation.
It also suggested that the local government and members of the tea industry should protect Wuyi Mountain's tea culture and numerous varieties, and encourage producers to sustain their efforts through organic cultivation in such a way that Wuyi Mountain tea will sell in the EU on the basis of World Trade Organization terms and EU standards.
Yang Jiangfan, president of Wuyi University, said that for Chinese tea to be popular in the West, the first priority is to increase the prevalence of Chinese tea culture.
"Wuyi Mountain tea has its own features and own geographic characteristics and historical foundations. Local companies should combine it with their products to better promote Wuyi Mountain tea in overseas markets," said Yang, who is also managing director of the China Tea Society.
Yang said that the different consumption habits have also resulted in diverse markets at home and abroad.
He added that Western consumers treat tea as a daily drink. Thus they prefer the convenience and standardized tastes gained from using teabags.
However, Chinese people endow tea drinking with cultural significance and enjoy the often complicated process of making tea.