Industry experts highlight growth outlook at 2nd Global Dubai Tea Forum 2008

During the first day of the biennial two-day forum, high-profile speakers focused on identifying consumer trends in order to further bridge the supply-demand gap in this truly global industry. They also considered the benefits of a full-fledged tea futures market to the trade.

Representatives from tea producing and consuming nations are participating in the forum, which is being held at the Hyatt Regency, Dubai, and is organised by the Dubai Tea Trading Centre (DTTC), an initiative of the Dubai Multi Commodities Centre (DMCC).

Delivering the keynote address, Farid Mohammed Ahmed, Secretary General, Dubai World, underlined Dubai's geographical and infrastructural advantages for the global tea trade. He pointed out that the emirate is located at a strategic crossroads between East and West, and has long served as a gateway for the trade.

Highlighting Dubai's role as the trade hub in the region and the ideal platform to host the Global Dubai Tea Forum, he said: "Driven by a diverse economy, Dubai is in the midst of a period of dramatic growth averaging around 10% for the past five years. The emirate's GDP growth is estimated to reach $108bn by 2015, with per capita income of $44,000. Trade through the emirate represented 80 per cent of the UAE's $233bn foreign trade in 2006."

Tea trade transacted through the Dubai Tea Trading Centre (DTTC) has witnessed year on year growth recording 5.2 million kilos in 2007, up from 4.3 million kilos in 2006, according to Ahmed bin Sulayem, Executive Chairman, DMCC. Total tea imports into Dubai touched 96.6 million kilos in 2007.

Also speaking on the first day of the forum, Kaison Chang, Senior Economist, Commodities, Food and Agriculture Organization of the United Nations, said: "World tea production reached an estimated 3600 million kilos at the end of 2006, with markets such as Kenya, India and Sri Lanka driving this robust growth. We expect tea production to maintain healthy growth levels over the next four years and surpass the 4000 million kilo mark in 2010."

According to figures presented by Kaison, demand for tea has risen significantly around the world, with India and China alone recording 42% of market share in global tea consumption. It was also noted that China's consumption has doubled in the past 10 years.

The first day of the Global Dubai Tea Forum also featured insights into tea consumption trends in Africa, Europe and America as presented by Manuja Peiris, Chief Executive, International Tea Committee, UK. He elaborated on various economic and social factors, such as food price inflation and worker welfare, which will have a bearing on the global tea trade and consumption patterns.

Dr. David Rutledge, Chief Executive Officer, DMCC, provided a special presentation on the commercial benefits of the development of a tea futures market. By locking in forward prices for at least two years, market participants are able to benefit from increased cash-flow predictability as well as improved increase to finance, he said.

"While a tea futures market is an adjunct to the physical market and not a substitute for it," said Dr. Rutledge, "Participants will nevertheless realise direct economic benefits, including improved price discovery and dissemination, allowing them to make clearer stockholding decisions and more efficiently share risk. Challenges to establishing a tea futures market do exist, of course, but if the industry demonstrates the will to bring such a market to life, everyone in this global trade will share the benefits."

While outlining the significant scope to further grow the global tea industry, other experts at the forum emphasised that successful coffee marketing techniques could be applied to the tea industry. Speakers called for tea exporting markets to capitalise on tea positioning as a lifestyle beverage of choice in order to reinvigorate tea sales and consumption in new markets.

Further presentations on the first day of the Global Dubai Tea Forum focused on topics related to marketing and branding initiatives for the tea industry, showing case studies of efforts taken by tea producing countries such as India, Sri Lanka and Kenya. The forum is being attended by leading experts from across the regional and global tea industry.