Report on the Tea Industry

> Report on the Tea Industry

(posted on 5/05/04)

Report on the Tea Industry

The Chamber has submitted to the Minister of Agriculture, Food Technology and Natural Resources, Hon. Nandcoomar Bodha and to the Tea Board, a report highlighting the challenges confronting the local tea industry. These concern namely a rising cost of production, and threats  resulting from trade liberalisation. In this context, a number of measures have been proposed in order to sustain the development of the industry.

The tea industry in Mauritius has a long history, having been established more than 125 year ago. Tea was until the 1980ís, the second largest revenue earner within the agricultural sector, after sugar. Indeed, during that period, exports of black tea averaged 5,000 tonnes, but declined dramatically thereafter following the fall in the international price in 1985. As a result, the exported product became hardly competitive, compared to large tea producing countries.

Some Key  Figures of the Local Tea Sector (2002) 

Area under tea cultivation: 680 ha 

No. of factories in operation: 4     
Production of manufactured tea : 1,381 tonnes              
No. of persons directly or indirectly employed: 2,200

Average annual teal consumption per capita (kilos): Mauritius: 1.1 compared to developed countries (such as UK and Ireland): 2.5 to 3 and to the Middle East: 1.5 to 2.

Since the end of the 1990ís, with a view to sustaining  the development of the industry,  tea manufacturers have embarked in a restructuring and consolidation process, whereby emphasis is laid on the development of innovative products and on the diversification of their activities (agri-tourism, aromatic and medicinal plantations).

Today, only four tea manufacturers, producing solely black tea and selling a wide range of designed packages and flavours under their respective trademarks, supply exclusively the local market. About 1,300 tonnes of tea is produced annually. A marginal volume (40 tonnes in 2002) comprising value-added tea (tea bags and luxury tins) is exported. Production figures over the last decade have registered a drastic downward trend as a result of the conversion of a significant area of public tea plantations into other agricultural activities.

On the external front, pressures are being exerted for greater trade liberalisation. However, due to its limited resources and to the small size of its domestic market, Mauritius cannot  benefit from economies of scale for its agricultural production. Hence, due to the absence of a level-playing field, the country is likely to suffer the most from competition coming from large agricultural producing countries, in particular its most vulnerable industries, among which the tea industry. In this respect, the Chamber recommends that special measures be taken in order to mitigate the impact of trade liberalisation on this industry.

The Chamber also stresses in the report that, notwithstanding its historical contribution to the development of the island over more than 125 years, the tea sector has still an important role to play in the economic and social development of the country.