China’s $111.5 billion domestic tea market dwarfs all others, but exports have declined over the past two years and are still flat midway through 2024.
In response, China has stepped up its marketing to stimulate demand and lowered prices to maintain volume growth.
Volume growth has recovered after the blazing sun scorched central China's tea producing regions in four successive heat waves in 2023, lowering yields and the quality of the summer harvest. In 2022, China exported around 375,000 metric tons valued at $2.1 billion for a 26.5% share of global tea exports by value.
Last year was lackluster. In 2023, China exported $1.74 billion worth of tea, a 16.3% decrease from 2022. The trade value of Chinese tea has been declining since 2021 when exports reached an all-time high of $2.3 billion.
Tea sales surged during the pandemic and its aftermath, rising to a 7.8% CAGR between 2021 and 2024. The 60-year average growth of tea is estimated at 2% per year. Global sales of exported tea from all countries totaled $7.87 billion in 2022, up by a mere 0.2% since 2018, when worldwide tea exports were worth $7.86 billion.
GlobalData estimates a 4.8% decline in the compound annual growth rate (CAGR) of overall value sales for tea from 2024 to 2027. GlobalData’s tea market research shows that overall sales will reach $72.5 billion in 2027.
Export volume is up a modest 1.2% overall through April 2024. Green tea exports are expanding at 5.6%, according to the Tea Industry Committee of the China Association for the Promotion of International Agricultural Cooperation. However, prices for green tea are down 17.4% compared to 2023 and $3.60 per kilo for April 2024.
According to China's Food and Soil Chamber of Commerce International Tea Information report, the US imported 2,622 metric tons of tea from China through March 2024, a year-on-year decrease of 4.7%. The US figures represent 9.7% of total Chinese imports. The US total included 1,262 tons of green tea, a year-on-year increase of 19.2%, accounting for 30.4% of the total US green tea imports. The US imported 1,361 tons of black tea during the first quarter of the year, a decrease of 19.7% compared to the first quarter in 2023. Organic certified tea imports from China totaled 211 tons, a year-on-year increase of 7.5%, accounting for 16.8% of China's total organic tea imports.
In 2022, green tea prices, on average, exceeded $5 per kilo for much of the year but fell below $4 per kilo average in 2024. Green tea accounts for 85.4% of China’s total tea export volume.
Exports of black tea are soaring as volume rose 21.3% over the same period last year. Chinese media enthusiastically participated in International Tea Day activities, hosting events worldwide and promoting its export capabilities.
Network Television
China-backed television and online networks aired a series of videos in May, serving as a platform to showcase the country’s export potential and the innovative advancements in its tea industry.
GlobalLink and The State Council (gov.cn) aired a 1.5-minute news report from Xinhua headlined: China’s Booming Tea Industry Imbued with New Momentum.
China Global TV America (America.cgtn.com) aired a segment on stagnant or declining wholesale tea prices in North America.
The scenic video focused on Anhui, China. “The ancient tea industry is undergoing a vibrant and innovative transformation in China,” reads the caption: “China produced more tea than anywhere else worldwide in 2023, 3.55 million metric tons of it in fact!” reads the captioned video. Production increased by 6.1%. “Chinese tea is a key force in the promotion of rural revitalization and domestic brands,” according to the video. “China’s tea industry is currently exploring ways to make the most of opportunities in the ultra-large domestic market. It has cultivated and expanded new growth areas such as tea beverages and derivatives, attracting more enterprises to compete.”
Zhou Li, the head of branding at Nongfu Spring Tea, shares their approach: “Through innovating and upgrading the original tea gardens with technologies, we aim to boost the output of tea leaves and enhance mechanization and labor productivity.” This commitment to innovation is a testament to China's drive for continuous improvement in its tea industry, reads the video caption.
The captioned video reports “outstanding performance in marketing, innovation, research and development of intelligent devices, and employment,” citing promising export results.
“Foreign consumers are gradually accepting Chinese tea beverages, which are among their options for drinks,” said Zhang Zhiqiang, general manager of Huangshan Greenxtract Co., Ltd.
GlobalData attributes the slowdown “to consumer cutbacks in the wake of inflation. Inflation around the globe is expected to fall in the coming years. Consumers have become more spending savvy and are looking to make the most out of their budgets, coupled with the more adjusted pricing, which will bring value growth closer to volume growth again,” writes Just-Drinks, a publication owned by parent GlobalData.