Dubai tea trade down 24% on lower output

Droughts and delayed rainfall in major producing countries such as India resulted in a global black tea deficit. (EB FILE)

Tea trade in Dubai fell 24.4 per cent to 112.3 million kg in 2009 after a fall in global production, data from Dubai's tea industry body showed yesterday.

Droughts and delayed rainfall in major producing countries such as India resulted in a global black tea deficit of around 56.6 million kg in 2009, a 3.2 per cent drop from the previous year, a Dubai Tea Trading Centre (DTTC) said in a statement.

Total tea trade amounted to 112.3 million kg in 2009, the statement said. In 2008, total volume had been 148.6 million kg, according to a previous statement.

Despite the drop in the emirate's total tea volume, tea traded through the DTTC reached 7.5 million kg in 2009, a 26.5 per cent increase from the previous year, the statement added.

Sanjay Sethi, head of DTTC, said: "This (rise) is due to our increased value-added services such as blending, packaging of tea bags as well as loose tea in retail formats, storage facilities and office space for tea companies, which makes DTTC appealing to international tea traders."

The DTTC was formed in 2005 and is a subsidiary of the Dubai Multi Commodity Centre (DMCC), set up by the Dubai government to promote commodity trade.

The DTTC facility offers 5,000 tonnes of storage capacity where producers can store tea up to 60 days free of charge.

Sri Lanka, India and Kenya are Dubai's top trading partners, contributing over 65 per cent of its total tea trade, said Sethi.

With an improvement in climate conditions this year, a trend of higher tea production had caused tea prices to be volatile over the past few weeks. However, the DTTC remains bullish on price levels as carry forward stock levels are low, he said.

DMCCA's new tea tag facility

The Dubai Multi Commodity Centre Authority (DMCCA) will establish a new tag and envelop printing facility in Dubai at a cost of Dh13 million by the end of this year, DMCCA Chairman, Ahmed bin Sulayem, announced at the Third Global Dubai Tea Forum yesterday.

The new facility is being built in partnership with German company Gundlach.

"This new facility will offer for the first time a complete printing of tea bags and envelopes in the GCC and enable our customers to have access to the complete range of products and services at a single location," said Sulayem. Paul von Schubert of Gundlach holding said the machines for the new facility will begin getting shifted to Dubai by December year. "The new facility is expected to be complete by December. So far, the printing of DTTC's tags and envelopes was carried out in Germany."

The DMCCA has no debt now and the centre is not in a need for raising more capital for any of its projects including its tea facility, said the Authority's CEO, Malcom Wall Morris. "We will finance the new tea facility ourselves." Morris said the DMCCA will pay back the final installment on its five-year $200m (Dh734m) later this year. (Shashank Shekhar)


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