Dubai fast becoming global tea trading hub

(AFP)   

Volume of tea passing through the emirate’s ports since the launch of the Dubai Tea Trading Centre three years ago has risen sharply n Two-day international forum beginsCoffee chains such asStarbucks, Costa and Central Perk are on the rise in the country so you would be forgiven for thinking that the coffee trading business is the strongest in the beverage industry.

The two-day event, which opens today at the Hyatt Regency, has been organised by the Dubai Tea Trading Centre (DTTC), an initiative of the Dubai Multi Commodities Centre (DMCC).

Experts will discuss best practices in enhancing tea production and marketing worldwide, and tea firms will showcase their latest products and services.

This is the second meeting of its kind – the first was held in 2006 – and the number of participants and countries attending has increased significantly.

This is hardly surprising, considering that Dubai is quickly becoming recognised as an international tea trading hub. The volume of tea passing through the emirate’s ports since the launch of DTTC three years ago has risen sharply. In fact, tea trading is so strong it is now considered as one of the main non-oil contributors to the UAE’s gross domestic product.

“The Middle East is an important consumer market for tea and has been witnessing steady growth in consumption,” DTTC head Sanjay Sethi told Emirates Business. “Tea trading is one of the main economic activities in Dubai.

“Tea is an extremely traditional industry and is still marketed in a largely traditional manner. With the marketing programmes followed by outlets such as Starbucks, Costa and others, coffee now has a more trendy image and hence is more visible.

“But at the end of the day tea is a much larger industry than coffee in terms of volume, consumption and imports. The UAE is ideally situated between the producing and consuming countries. Given the excellent shipping and port infrastructure, Dubai becomes extremely important for tea producers and merchants worldwide.

“More importantly, since Dubai is neither a producer nor a major consumer of tea it offers a neutral platform for several multi-origin teas to be stocked, blended and repacked and then exported to consuming countries.”

David Rutledge, Chief Executive Officer of DMCC, said: “In under three years the Dubai Tea Trading Centre has become a catalyst for the entire value-chain of the regional and global tea industry, and we are getting closer to our vision of establishing Dubai as the global gateway for tea.

“The increased volumes of tea passing through the ports of Dubai and several initiatives introduced for the industry at large are testament to DMCC’s commitment to the trade. Equally important is establishing international standards and best practices through initiatives such as the Global Tea Forum.”

Tea is one of the most important economic sectors and the mainstay of some of the developing economies as it provides income and employment throughout the year and requires relatively little investment in the beginning.

The Dubai Tea Trading Centre processes teas from 14 countries – India, Sri Lanka, Kenya, Rwanda, Malawi, Tanzania, Mozambique, Vietnam, Indonesia, Bangladesh, China, Papua New Guinea, Iran and Zimbabwe.

The centre, in line with its mandate to further increase the tea trade in and through Dubai, also facilitates sales to buyers in the GCC states, Iran, Iraq, Jordan and former Soviet republics and plans to expand into other markets.

Sethi said: “The larger tea-producing countries are India, Sri Lanka, China, Kenya, Indonesia and Vietnam, and teas from these countries are extensively consumed in the Middle East and adjoining regions. In fact 27 per cent of exports from the producing countries are imported into the Middle East and adjoining regions. Traditionally, consumers in the UAE prefer black tea from India, Sri Lanka and Kenya. However, in recent years there has been growing awareness and interest in green teas.”

In 2006 DTTC facilitated the trading of 4.3 million kilograms of multi-origin teas – almost double the figure from the previous year. While 2007 is still being evaluated, the figure is expected to have grown by at least 5.5 million kg despite traders facing problems with increased prices.

Meanwhile, the volume of tea physically cleared into Dubai rose from 96.6 million kg in 2005 to 105.5 million kg in 2006.

Sethi said: “Across the world tea registered a move towards higher prices, which was the result of a variety of factors, including the drought in Sri Lanka, political upheaval in Kenya and the strengthening of the Indian rupee – all of which affected the global demand and supply situation.

“However, trade has seen significant growth in the last few years as Dubai has fine-tuned its infrastructure and shipping facilities, allowing for greater re-export and trans-shipment.”

So tea is doing wonders for the economy – and by recognising the little green leaves’ vast potential the Dubai Tea Trading Centre will continue to encourage the growth of the trade. “Tea will definitely continue to have a great future in the region,” added Sethi.

Your daily cuppa at the office

Kadak At Your Office – the UAE’s first tea delivery service – was launched last year.

The online service, part of the C-Mart Company, delivers flasks of Kadak tea on a daily basis for a monthly fee.

Kadak is a stronger version of regular teabag-infused tea that particularly appeals to the Emirati and Indian populations.

Abdul Raheem Mohammed, General Manager of the service, told Emirates Business: “We’ve only been around for a few months but because tea is so popular in the region we now have more than 100 customers, mostly of Emirati and Indian origin.”

The service costs Dh220 a month for daily deliveries, excluding Fridays, and each flask is equal to eight cups of tea. A range of teas are on offer, including mint and cardamom, and different flavours of milk are available, including saffron, ginger or chocolate.

“At the moment we cover Dubai, Sharjah and Ajman but we’re looking at Abu Dhabi and Al Ain also,” he said.

“The service is a message to young Emiratis who invest in non-service sectors such as properties and shares to consider investing in other services, such as this. As long as you have a good idea anything is possible.”

The numbers

4.3m: Kilogrammes of multi-origin teas were traded through the Dubai Tea Trading Centre in 2006

105.5m: Kilogrammes of tea were physically cleared into Dubai in 2006. The figure was 96.6 million kilograms in 2005

27%: Of tea exports from producing countries are imported into the Middle East and adjoining regions. The big tea-producing countries are India, Sri Lanka, China, Kenya, Indonesia and Vietnam

14: Countries have their tea processed at the Dubai Tea Trading Centre. The countries include India, Sri Lanka, Kenya, Rwanda, Malawi, Tanzania, Mozambique, Vietnam, Indonesia, Bangladesh, China, Papua New Guinea, Iran and Zimbabwe.