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Tea Exporters Association Sri Lanka

May 2025

top stories

Subject Page No.


1. WB Beverage Market Outlook – April 2025....................................................................2

2. Impact of US Tariff Adjustments on Chinese tea............................................................5


3. Tea Tariff relief but no exemption forthcoming...............................................................7

4. Is the Tea Market Saturated?.........................................................................................8


5. Kenya suspends RA certification..................................................................................11

6. Kenya waived taxes on packaging materials................................................................12

7. Kenya targets 50 million kg of tea to China by 2030....................................................13

8. Assam raises concerns over new EU regulations impacting exports...........................14

9. Green Tea Market hits $ 16 Billion in 2025..................................................................16

10. Chinese scientists unlock secret to preserving freshness in late-spring tea..............18



 11. Ruble steadies at around 80 to Dollar........................................................................20

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Tea Exporters Association Sri Lanka
May 2025

Lead Story
WB Beverage Market Outlook – April 2025
The World Bank’s beverages price index fell in early April after surging by 16 percent in 2025Q1(q/q) to a
level 65 percent higher than a year earlier, reflecting sharp increases in coffee and cocoa prices driven by
production shortfalls . The index is projected to rise by almost 20 percent in 2025 (y/y) before declining by
approximately 11 percent in 2026 as coffee and cocoa production begins to recover.

Coffee prices eased in early April, following record nominal highs earlier this year. Arabica surged to $9/kg in
February -March while Robusta approached $6/kg. In 2025 Q1 (q/q), Arabica rose by 26 percent —nearly
doubling from a year earlier— while Robusta gained 12 percent, marking a two thirds increase year-on-year.
Global coffee production, which rose to about 170 million bags in 2023-24, is expected to rise further, to 173
million bags in 2024 -25, but remain below 2020 -21 levels . The lingering effects of the 2021 -22 weather -
related production shortfall , coupled with steady demand growth , have continued to drive prices higher .
Arabica prices are projected to climb by more than 50 percent in 2025 (y/y)—assuming prices remain
broadly stable for the rest of the year —before declining by 15 percent in 2026 , in response to higher
production expected by Colombia, the world’s second largest Arabica producer. Robusta prices are expected
to rise by nearly 25 percent in 2025 before falling by 9 percent next year. This baseline forecast is subject to
significant risks, particularly the upside risk that low rainfall and above-average temperatures earlier in the
year could negatively affect the 2025–26 harvest in Brazil, the world’s leading coffee producer.

Cocoa prices softened in March and early April , after climbing to nearly $11/kg in January . Despite the
recent easing , prices remained more than 15 percent higher in 2025 Q1 (q/q) compared to the previous
quarter , and nearly 70 percent above year -earlier levels . The surge in cocoa prices has been driven by
unfavorable weather conditions in West Africa , compounded by strong seasonal demand . Global cocoa
production declined by 12 percent in the 2023-24 season , to 4.3 million metric tons from 4.9 million metric
tons in 2022-23. The decline was due to lower output in Côte d’Ivoire and Ghana, which together account for
nearly 60 percent of global cocoa production . Supply conditions are expected to improve in the 2024 -25
season (ending in September 2025) with global output expected to increase by more than 11 percent, mostly
driven by improved weather in Côte d’Ivoire and Ghana , where production is forecast to rise by 5 and 34
percent , respectively . After increasing by a further 9 percent in 2025 (y/y), cocoa prices are projected to
decline by 13 percent in 2026 as additional supplies enter the market . However , the potential return of
adverse weather in West Africa remains a key upside risk to this forecast.

Tea prices (three -auction average ) declined by 11 percent in 2025 Q1 (q/q), driven by a sharp , primarily
seasonal, 38 percent drop at the Kolkata auction. In contrast, prices at the Colombo and Mombasa auctions
remained relatively stable, reflecting adequate supplies from Sri Lanka. Although supply concerns persist in
some East African tea exporters —particularly Tanzania and Uganda —the global tea market remains well-
supplied overall, bolstered by improving conditions in Sri Lanka and especially Kenya. Following a projected
18 percent decline in 2025, driven by a modest recovery in supplies from South Asia and East Africa , tea
prices are expected to rebound by 12 percent in 2026.
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(World Bank Commodity Market Outlook)

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doMEStIc nEWS
SRI LANKA TEA PRODUCTION
APRIL 2025/2024 - in MT JANUARY TO APRIL 2025/2024 - in MT

(SLTB)

SRI LANKA TEA EXPORTS

APRIL 2025/2024 - in MT JANUARY TO APRIL 2025/2024 - in MT

(SL Customs - Courtesy Forbes & Walker Tea Brokers (Pvt) Ltd)

MAJOR IMPORTERS OF SRI LANKA TEA

(SL Customs - Courtesy Forbes & Walker Tea Brokers (Pvt) Ltd)
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Tea Exporters Association Sri Lanka
May 2025

market INformatIoN
World Tea Crop
The latest tea cro figures of some leading tea producing countries are furnished below (in million Kg).

(Forbes & Walker Tea Brokers (Pvt) Ltd)

Impact of US Tariff Adjustments on Chinese tea

The Trump administration ’s policy imposed a 25% tariff on approximately $300 billion worth of Chinese
goods, with agricultural tariffs rising to 30%. Tea, categorized under agricultural products, saw its average
tariff surge from 5% to 30%, while premium varieties like Pu’er and oolong tea faced additional levies of up
to 35%.

A retroactive clause applied the new rates to orders signed before December 31, 2024, but not yet cleared
through U.S. customs . This forced Chinese exporters to absorb an extra $1.2 per kilogram in tariffs ,
exacerbating inventory pressures and cash flow challenges for many tea companies.

II. Trade Data and Market Shifts

Declining Export Volume and Value

According to China Customs, tea exports to the U.S. from January to April 2025 totaled 12,000 metric tons,
a 12.3% year-on-year decrease , with export value dropping 18.6% to $68 million. Green tea suffered the
steepest decline (-15.8%), while black tea saw a milder 9.4% reduction due to increased domestic U.S.
production.

Market Share Redistribution

India and Sri Lanka capitalized on the tariff-driven vacuum, increasing their U.S. tea exports by 8% and 6%,
respectively . Meanwhile , U.S. domestic tea cultivation expanded , with new plantations in Texas and
California boosting low- to mid-tier tea bag production by 23%.

Price Inflation and Demand Suppression

Retail prices for Chinese tea in the U.S. rose by 25–30%, with premium loose-leaf varieties (e.g., Mingqian
Longjing , Jin Junmei ) spiking by 40%. A Tea Association of the USA survey found that 34% of U.S.
importers reduced or halted purchases of Chinese tea.
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III. Industry Adaptation Strategies and Challenges

Transshipment and Supply Chain Restructuring

To bypass tariffs, companies rerouted exports through Southeast Asia. For instance, a Yunnan-based tea
producer shipped raw tea to Vietnam for refining and repackaging , leveraging Vietnam ’s CPTPP
membership to cut costs by 12–15%.

E-commerce Channel Expansion

Chinese firms accelerated direct-to-consumer sales via platforms like Amazon and TikTok Shop. Zhejiang
Tea Group reported a 45% surge in cross-border e-commerce sales, with small-pack products (under 50g)
comprising 68% of orders, reducing per-unit tariff burdens.

Product Innovation and Premiumization

Aligning with U.S. health trends , companies developed organic and functional teas. Anhui Academy of
Agricultural Sciences collaborated with exporters to launch gamma -aminobutyric acid (GABA )-enriched
green tea, which gained FDA approval. Despite a 30% price hike, orders grew by 17%.

Logistical Innovations

The China-Europe Railway Express launched a “tea-dedicated route” fromHefei to Los Angeles, slashing
shipping time from 45 days by sea to 18 days . Coupled with overseas warehousing , this improved
inventory turnover by 25%, though cold-chain costs remained 20% higher.

IV. Future Outlook and Policy Recommendations

Short-Term Pressure vs. Long-Term Recovery

U.S. Tea Wholesalers Association forecasts predict a 5–8% annual decline in Chinese tea exports for late
2025, but premium varieties may rebound due to irreplaceable quality. By 2026, China’s share in the U.S.
premium tea market could recover to 28% (down from 35% in 2024).

RCEP Opportunities

Establishing processing hubs in RCEP member countries (e.g., Malaysia , Indonesia ) could reduce tariffs
via origin accumulation rules. Fujian-based firms, for example, are building Pu’er fermentation facilities in
Malaysia with 500-ton annual capacity.

Domestic Policy Support

Industry stakeholders advocate raising tea export tax rebates (currently 9%), expanding export credit
insurance, and establishing an international tea trading center to strengthen pricing power. Hunan Province
has piloted “Export Tea Quality and Safety Zones,” subsidizing testing and certification.

(Sunsytea.com)
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Tea Exporters Association Sri Lanka
May 2025

Tea Tariff relief but no exemption forthcoming

Although some countries have negotiated a reduction in tea tariffs, baseline tariffs remain at 10% and all
countries face a July 9 deadline when reciprocal tariffs come back into force.

The mutual decision by China and the US to reduce tariffs for 90 days while negotiating a “new normal” is
sufficient to resume trade that was virtually halted as US duties climbed to 152.5% on imported tea.

US Trade Representative Jamieson Greer announced on May 12 that the US rate on Chinese goods would
be reduced by 115 % to 30%. China agreed to also lower its 125 % rate by 115 % to 10%. Trump also
reduced duties from 120% to 54% on low-value shipments originating in China and Hong Kong. Duties are
calculated on the declared value of the shipment. If the amount is under $100 a flat fee of $100 is applied.
Trade officials said the flat fee will not increase to $200 in June as previously announced.

The two sides canceled 91% of tariffs on each other ’s goods and suspended another 24% for 90 days .
During that period, US importers landing Chinese tea will pay 37.5% duties.

Treasury Secretary Scott Bessent said, "The consensus from both delegations this weekend is neither side
wants a decoupling.”

Baseline tariffs remain in place for coffee and tea, and all countries face a July 9 deadline when reciprocal
tariffs come into force after previously being suspended.

The immediate impact:

Prices are going up. Tariffs will significantly increase the cost of green coffee beans and processed tea for

importers and roasters.

Consumers will experience inflationary spikes as wholesalers cannot absorb the additional tax.

Independent and small specialty tea and coffee retailers are susceptible to price fluctuations and are
concerned that price-sensitive consumers will seek cheaper alternatives.

Trade flows are shifting due to the wide variance in reciprocal tariffs. East African suppliers , for example ,
face 10% duties while Vietnamese coffee and tea producers face 49% tariffs.

Logistical disruptions inevitable

Importers have seen their landed costs increase overnight . Tea harvested in March and April will soon be
on the water . Since tariffs are due as products enter the US, not when they leave their origin , distraught
traders are experiencing sticker shock. Importers are expected to pay 25% to 35% more for green coffee
and 20% to 50% more for tea.

Compounding these concerns is that the trade war has virtually halted shipments to and from China .
Logistics companies report plunging fees, limited service, blank sailings, reduced demand, and higher costs
. Shipping containers are piling up at some ports while others report shortages.

The German container shipping group Hapag -Lloyd canceled 30% of China -US-bound shipments , and
bookings declined by 25%. Container rates have declined to March 2023 levels.
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An attorney at Huth Reynolds LLP, who represents Fortune 500 US retailers in resolving maritime disputes
related to US-China trade and global shipping issues, explains that many tea supply contracts lack clauses
addressing tariff risk, leaving buyers and sellers scrambling to renegotiate terms amid narrow margins. “Force
majeure is tricky,” she says. Force majeure defenses are unlikely to hold in court without specific provisions,
and termination rights may be limited . US importers may consider ending supplier relationships unless
products are unique or certified. In the meantime, poorly documented contract changes could result in costly
disputes, underscoring the need for formal written agreements in a volatile trade environment, she explains.

Tariff Exemptions

In April 2025, a Presidential Memorandum clarified exemptions for certain products, such as semiconductors,
but did not include tea. Advocacy groups continue pushing for relief, citing tea's unique nature and minimal
impact on national security concerns.

Peter F. Goggi, president of the Tea Association of the USA, said, “The United States is not a tea-producing
nation. There is no commercially grown tea that requires protection via tariffs, nor are there any tea-related
farm-based jobs that these tariffs would protect.”

“We are recommending that any agricultural product that is not or

cannot be grown in the US in sufficient quantities to meet domestic
demand also be exempted,” said Goggi.

He appealed to industry leaders to ask federal representatives to “

work to exempt tea and other agricultural products.” The letter lists
tea, coffee, cacao, bananas, spices, and other crops that cannot be
grown here or produced in sufficient volumes to meet domestic
demand.

(STiR Coffee & Tea)

Is the Tea Market Saturated?

At first glance, the US tea market appears crowded . A proliferation of online tea retailers , overstuffed store
shelves , and an ever -expanding array of offerings from legacy brands all suggest that the category is
bursting at the seams. But a closer look at the numbers tells a different story.

According to the Tea Association of the USA, the US tea market reached nearly $14 billion in 2023, up about
$1 billion since 2021. This steady growth points to expansion , not stagnation , especially when compared to
the US coffee market , which generated approximately $99 billion in retail sales that same year (Mintel ). It
becomes clear just how much room tea still has to grow.

Much of the saturation narrative stems from the tea industry ’s low barriers to entry, particularly in direct-to-
consumer models that bypass traditional retail. This ease of access creates the illusion of crowding , but in
reality, opens the door to innovation and specialization.

Tea’s accessibility creates what might be called an “entrepreneurial paradox.” The simplicity of launching a
tea brand means many new entrants, which can make the market feel saturated. But this accessibility is also
what drives the category’s evolution.

New brands can enter the market with minimal capital, especially through e-commerce . As a result, today’s
tea industry is rich with diversity , with brands catering to niche tastes , wellness goals, brewing styles , and
cultural preferences.
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Is the Tea Industry Stuck in Old Ways?

Despite its long history and incredible diversity, the tea industry is surprisingly conservative in its innovation.
For all the buzz about specialty and wellness -focused products , many companies still rely on traditional
formats and conventional branding . This leaves three key areas ripe for transformation : product innovation ,
brand storytelling, and technology adoption.

Tea has the potential to be as dynamic as any other beverage. Many companies miss opportunities to create
novel experiences that appeal to modern consumers.

Tea’s five-thousand -year history is steeped in story, culture, ritual, terroir, and craftsmanship . Yet too many
companies settle for generic packaging and formulaic marketing that fail to convey what makes their products
meaningful.

Many tea brands lag behind in a digital-first world. From marketing to supply chain management, technology
remains an underutilized tool.

Growth-minded tea brands, emerging or established , can pursue several strategies to thrive in the evolving
landscape:

Niche Specialization : More brands find success by focusing deeply on well-defined audiences rather than
casting a wide net. Vertical Integration and Transparency - Brands that can forge direct relationships with
growers gain more than supply control. They build compelling stories and ensure quality from the source, and
deeper consumer trust. Experience -Centric Models - Modern tea drinkers aren’t just looking for a beverage ;
they’re seeking rituals, mindfulness , and connection . Brands that design immersive experiences around tea
can foster loyalty and offer valuable intangible benefits to customers . Sustainability as Strategy -
Sustainability is no longer optional . Companies demonstrate how eco -conscious production and social
responsibility can differentiate products while addressing the ethical concerns of increasingly informed
consumers.
The tea market isn’t saturated; it’s maturing. Accessibility may invite
competition , but it also creates fertile ground for innovation and
ensures differentiation between tea brands . The vast gulf between
the tea and coffee markets signals significant untapped potential. By
focusing on innovation, storytelling, and serving a niche, businesses
can grow and help redefine what tea means to the next generation
of drinkers worldwide.

(STiR Coffee & Tea)

Regular 'Black' Tea is still No. 1 in UK

The nation's favourite traditional brew is holding strong in the popularity stakes among Brits – world renowned
for being a nation of tea lovers – according to the latest real-world New Tea Census Study of over 1,000 Brits
commissioned by the UK Tea and Infusions Association (UKTIA).

"The publishing of the latest New Tea Census Study coincides with International Tea Day (21st of May) this
year – a day designated by the United Nations to raise awareness about tea's history , cultural significance ,
and economic importance," comments Dr Sharon Hall, Chief Executive of the UKTIA. "As a nation with a long
history of tea drinking, Brits are ideally placed to raise a cup or two to celebrate. What's more, the Tea Census
Study data clearly shows that the majority of us stick to tradition when it comes to our brew choice," notes Dr.
Sharon Hall further.
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Dr. Sharon Hall continues : "For 71% of us, traditional black tea, with or without milk, holds strong as our
main infusion of choice, with one in six (16%) more likely to opt for herbal infusion, and one in eight (13%)
predominantly choosing green tea, according to the UKTIA Tea Census real-world data."

However , interestingly , the split between our preferred infusion changes with age, according to the UKTIA
Tea Census Study.

"We found some noteworthy differences between the older and younger generations," says Dr Sharon Hall,
adding, "For example, among the 18-24 age group, two thirds (63%) said they mainly drink black tea, while
around a fifth (20%) are experimenting with a range of herbal infusions or drinking green tea."

She continues, "That's compared with the 65+ age group, among whom over four fifths (86%) mainly drink
black tea, but fewer than one in 10 choosing herbal or green tea."

Additionally, more women than men were likely to deviate from tradition when it comes to their main brew of
choice, with one in five women (19%) opting for herbal infusions compared to just one in eight (12%) men.

"Something that unites us all, however ," says Dr Sharon Hall , "...is the vast majority across all the age
groups (93% overall ) prefer the convenience of making their brew with a tea bag rather than preparing a
loose-leaf infusion."

Perhaps this tendency to prefer tea bags reflects the need for convenience in our ever faster paced modern
world, with the UKTIA Tea Census Study data also suggesting that perhaps many of us are prone to making
our tea in too much of a rush.

"Three quarters (73%) of those surveyed admitted to leaving their teato brew for less than the 3-4 minutes
we at the UKTIA would recommend for the ideal cup of regular black tea," says Dr Sharon Hall.

In fact , the ideal tea brewing time of 3-4 minutes suggested by the UKTIA applies to a wide variety of
different teas, including Darjeeling, Assam, Ceylon, and Earl Grey black teas. [2]

When asked how long they left their tea to brew before drinking it, the top answer overall was just 1-2
minutes, while nearly a fifth (18%) said less than a minute, and 16% said 2-3 minutes.

Dr. Sharon Hall comments , "Only one in 14 (7%) Brits let their tea brew for what we at the UK Tea and
Infusions Association would generally regard to be the required time for most types of tea: 3-4 minutes. That
sadly leaves the vast majority of Brits missing out on the perfect tasting cuppa. Plus, leaving tea to brew for
three to five minutes will ensure the optimal amount of polyphenol compounds are released, such as flavan-
3-ols and theaflavins . Polyphenols are natural plant compounds that contribute to tea 's flavour and
mouthfeel, and they provide nutritional benefits like fruit and vegetables.

Dr. Sharon Hall continues: "Although younger generations are experimenting with a range of teas more than
their parents and grandparents, our new Tea Census Study data clearly shows that the nation's favourite is
still a traditional brew of regular black tea."

(MENAFN)
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Kenya suspends RA certification

Kenya has suspended the Rainforest Alliance certification and audit processes for all tea factories in the
country, citing high costs and limited tangible benefits to farmers.

The move , announced through a circular issued by the Agriculture Principal Secretary , is aimed at
alleviating the financial burden on smallholder tea producers.

According to the statement , the government is concerned that the expenses associated with maintaining
the certification have largely fallen on tea factories and, by extension, on farmers.

He stated that the costs should be absorbed by end consumers who demand certified products, rather than
by growers who gain little in return.

The decision to suspend the certification scheme follows a high-level consultative meeting involving the
Tea Board of Kenya, the Kenya Tea Development Agency (KTDA), and Rainforest Alliance representatives
from Kenya and the broader region. Participants agreed that the certification system had not demonstrated
sufficient positive impact to justify the financial pressure it placed on producers.

All tea factories have now been instructed to halt any ongoing or upcoming audits and certification
procedures related to the Rainforest Alliance standard . The suspension is to remain in place pending a
further joint resolution on the matter.

The government ’s decision aligns with broader efforts to ease the cost of doing business in Kenya ’s tea
industry, which has faced persistent challenges due to high production expenses and poor earnings among
farmers.

Authorities have previously raised concerns that such overheads reduce competitiveness and profitability
for small-scale producers.

The Rainforest Alliance , a global non-profit organization , promotes sustainable agriculture and business
practices through its certification program. Farms and factories that meet its standards are allowed to use
the Rainforest Alliance seal, often helping them access premium international markets.

However, critics argue that the cost of compliance is too high for many producers, particularly in developing
countries.

While certification is intended to improve environmental sustainability and worker welfare , the actual
financial return for smallholder farmers has remained questionable.

(Africa Business News)

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Kenya waived taxes on packaging materials

The Government of Kenya has waived taxes on packaging materials used in the tea sector as part of a
broader strategy to improve farmer productivity and boost incomes through value addition.

The announcement was made by Cabinet Secretary (CS) for Agriculture and Livestock Development ,
Mutahi Kagwe, during a recent stakeholders meeting.

CS Kagwe emphasized the government ’s commitment to revitalizing the tea industry , noting that the
removal of taxes on packaging materials would significantly reduce value addition costs and allow farmers
to benefit more from their produce.

He reiterated the government ’s focus on supporting the tea sector by working with stakeholders to access
new international markets for Kenyan tea.

“We want to make changes in the tea industry for farmers to benefit from their tea. We have removed taxes
related to packaging materials, a major contributor to high costs on value addition,” said CS Kagwe.

To help farmers increase earnings, Kagwe encouraged them to produce high-quality tea by adhering strictly
to proper leaf plucking practices . He stressed the importance of harvesting only two leaves and a bud to
ensure top-grade tea, which commands better prices both locally and abroad.

“Farming is business and we must look at it from a business point of view. If you go to three leaves and a
bud your quality will come down. Four leaves or more leads to even lower quality and reduced value,” he
added.

In terms of market expansion , Kagwe revealed that Kenya is working to reclaim the Iranian Orthodox tea
market and strengthen its position in Pakistan.

He further announced that the country will open an orthodox tea auction window under the Integrated Tea
Trading System (ITTS) in June, supervised by the East African Tea Trade Association (EATTA) and the Tea
Board of Kenya.

Additionally , the Ministry of Agriculture will partner with county governments to enhance agricultural
extension services . The initiative includes training agripreneurs to guide farmers on soil health, input use,
modern farming practices, and value addition techniques to raise productivity and tea quality.

Farmers will also benefit from ongoing training programs that promote the use of new technologies and help
them adapt to changing market trends.

(Africa Business News)

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Kenya targets 50 million kg of tea to China by 2030

Kenya targets to grow its tea exports to China by more than fourfold in the next six years , a government
official said recently.

Mutahi Kagwe , cabinet secretary for agriculture and livestock development , said the goal is to increase
Kenya's tea exports to China from 12.42 million kg in 2024 to 50 million kg by 2030.

President William Ruto recently met Chinese tea investors as part of efforts to strengthen Kenya ’s tea
exports to the country amid the declining tea prices.

The meeting with Fuzhou Benny Tea Industries, led by its chairperson, was aimed at deepening trade ties
and expanding the market for Kenyan orthodox and specialty teas in China.

It follows Ruto ’s recent state visit to the nation . Benny Tea Industries , ranked among the top three tea
companies in China, expressed strong interest in sourcing its annual orthodox tea requirements from the
country.

In a statement , Ruto stated that his administration is prioritizing the growth , packaging , and export of
specialty teas to increase agricultural revenues.

“Our plan to boost agricultural production , expand markets , and increase farmers ' earnings has been
progressing well. We are not only harvesting more maize and producing more tea, coffee and sugar, but
the prices of these products have improved significantly,” he said.

During the discussions, Benny Tea committed to investing in modern tea processing factories in select tea-
growing counties to boost value addition and enhance the competitiveness of Kenyan tea in global markets.

The company also pledged to invest in modern tea processing facilities in key tea-growing counties , a
move expected to enhance value addition and competitiveness of Kenyan orthodox tea in international
markets.
This initiative comes at a time when the small -scale tea farmers are
grappling with declining global prices.

The World Bank projects a further 2 per cent decline in tea prices in
2025, attributing the downturn to robust supply from major producers
and weak demand from key importers such as Iran.

(Africa Food Business/ Xinhua)

Kenyan tea exports fell by 20% in 1Q 2025

Revenue from Kenya's tea exports fell by 20 percent in the first quarter (Q1) of 2025 due to lower shipment
volumes, the Kenya National Bureau of Statistics said recently.

The country earned 46.07 billion Kenyan shillings (about 356 million U.S. dollars ) between January and
March , down from 446 million dollars in the same period last year, the statistics agency said in a report
released in Nairobi, the capital.

Export volumes declined to 157 ,514 tons in the quarter , down from 169 ,830 tons a year earlier , a 7.3
percent drop attributed to reduced production following a prolonged dry spell.
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The Tea Board of Kenya (TBK ) said in a recent statement that the
three months were characterized by unusually dry weather.

"This had a significant impact on tea production, mainly in February,

with output falling by 21 percent in the east of the Rift and 18 .6
percent in the west," said chief executive officer of the TBK.

Kenya is seeking to expand its tea export markets beyond traditional

destinations such as Pakistan , the United Kingdom , Russia , and
Chad.

(The peninsula Qatar)

Assam raises concerns over new EU regulations

impacting exports
The Tea Research Association Tocklai (TRA Tocklai ) in Assam , has raised serious concerns about new
European Union Commission regulations restricting three chemical compounds commonly used in Indian
tea production, particularly in Assam. According to officials, the regulations will lower the Maximum Residue
Level (MRL ) of Thiamethoxam and Clothianidin to 0.05 ppm from March 2026 . Similar constraints for
Thiacloprid were effective from May. These substances are essential for controlling pests in tea plantations.

Various Indian organizations , including the Tea Board, TRA Tocklai, Department of Commerce, and Indian
Embassy in the EU, have approached DG Trade of the EU, requesting time to phase out existing chemicals
until alternatives receive approval. India's tea exports to the EU and UK amount to 53 million kgs per annum
, predominantly from Assam. These regulations can impact the supply of 40 million kgs from Assam every
year. EU and UK importers are worried about purchasing Indian teas, as they maintain tea stocks for 12-24
months, potentially facing compliance issues when the new regulations take effect.

Indian Embassy representatives in Brussels are scheduled to meet EU officials in early June to address
trade matters . TRA Tocklai has petitioned senior EU officials for a five-year transition period from current
chemicals to newer alternatives.

"Since good Assam orthodox teas are exported to the EU and UK, the new EU regulation may cause a
major hindrance to exports, and reputed tea importers like Thiele & Co have sought the intervention of the
Assam chief minister in saving the reduction of tea exports from Assam," said Joydeep Phukan, Secretary
and Principal Officer at TRA Tocklai . "The alternatives such as Chlofenapyr , Tolfenpyriad , and
Flupyridifurone are not approved for use in tea by CIBRC India," he added.

It noted that recent EU legal developments threaten the established partnership between Indian and
European tea industries . "We understand that the Indian Ministry of Commerce and the Tea Board have
sent a formal request to the EU , asking for a three -year extension for the use of Thiamethoxam and
Clothianidin . A response is still pending ," read the letter . The letter warned that export uncertainty could
affect Assam this year itself. "We are deeply concerned that Assam could lose one of its most vital export
markets, resulting in significant losses in foreign currency revenue. The reputation of Assam tea may suffer,
and buyers could turn to alternative origins," read the letter.

(The Times of India)

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Fair Trade appeals to UK businesses

Fairtrade is warning of an “important window of opportunity ” to drive systemic change for farmers
producing tea for British consumers.

The organization is urging the Government , businesses , retailers and tea drinkers to take action that
ensures fairer pay and working conditions for farmers across the world as part of a major campaign
launched on the International Tea Day.

Scaling up Fairtrade impact across the tea sector has been a particularly difficult and longstanding
challenge compared to some of the other certified commodities, such as bananas or cocoa.

Working conditions can be tough , exacerbated by climate impacts and poverty , while global supply has
often outstripped demand, causing tea prices to drop lower than the cost of production.

Moreover, around a fifth of Fairtrade’s certified producers globally work in tea, which means sales are split
across a large number of producers.

Even though 100% of their product is eligible, they only sell on average 4% of the tea they produce on Fair
Trade terms – volumes Fairtrade is now pushing to grow.

A global trend towards legislation that ensures businesses act responsibly provides a key opportunity for
meaningful change, the organization said.

It also argued that the UK ’s significant history , market and consumption of tea means it is uniquely
positioned to tackle the systemic inequality seen across the tea sector.

Eleanor Harrison, chief executive of the Fairtrade Foundation, told reporters: “The people growing our tea
should be able to live with dignity, to be safe at work and to earn enough to feed themselves, their families
and to be able to plan for the future.

“Making systemic changes to the tea sector to deliver fairer incomes and wages, safer working conditions
and protecting our future cups of tea with investment in climate resilience is something within our collective
control and agency.

“We can through both demanding and enabling fairer trade at scale , working together , improve
employment, women’s empowerment and rural economies for 39 million people globally.”
In a report released alongside the campaign launch , the organization
urged the UK Government to follow the EU by introducing legislation that
ensures businesses protect human and environmental rights in their supply
chain , and to support producers through international climate finance
commitments.

Meanwhile, British shoppers are encouraged to support farmers by buying

Fairtrade products and signing Fairtrade ’s “Brew it fair” petition , launched
recently.

“Tea reflects so much of what is going on in the world right now, the power
imbalances , growing inequalities and the lack of transparency ,
accountability , and the cuts to vital funding that should support the most
vulnerable.”
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Tea Exporters Association Sri Lanka
May 2025

She added that the role of trade has “never been more central to rebalancing the world we all share”.

“We have a long history both good and bad in terms of the global tea trade,” she said. “This is one where
the UK could genuinely show global leadership.”

(Independent)

Green Tea Market hits $ 16 Billion in 2025

According to the Green Tea Global Market Report 2025 by The Business Research Company , the global
green tea market just leapt by an astonishing USD 1 billion in growth year-over-year, reaching new heights
in 2025 to USD $16.01 billion . The report predicts a trajectory that shows no signs of slowing , with the
market expected to reach USD 29.2 billion by 2033, growing at a CAGR of 5.56% from 2025 to 2033.

It’s more than just health hype. Consumers are shifting from sugary beverages to functional , plant-based
hydration. Green tea, rich in catechins, L-theanine, and natural polyphenols, has emerged as the wellness
worlds ’ quiet champion , touted for antioxidants properties , weight control support , and a connection to
longevity. And it is not just Western consumers driving demand. Asia’s premium tea segment is booming,
with a surge in export interest from wellness brands, boutique retailers are looking for the next-generation
beverages.

With global demand surging, the competition for quality green tea is reaching an all-time high. The largest
producer of green tea globally is China, followed by Japan, Vietnam, Indonesia, and India are now in a race
to position themselves as the world’s top green tea origin in quality, and only a handful will make the cut.

(World Tea News)

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Tea Exporters Association Sri Lanka
May 2025

Mixed fortunes for Malawi in 2024

The tea industry faced mixed fortunes in 2024 with production increasing slightly to 46.3 million kg, but
declining prices undermined total revenues.

Data contained in the Reserve Bank of Malawi (RBM) Report and Accounts for the Year Ended December
31 2024 shows that tea output increased by 0.8 percent to 46.3 million kg in 2024 , but the sector was
affected by continued decline in prices.

The volume of tea sold saw a marginal growth of 1.5 percent , reaching 5.5 million kg compared to 5.4
million kg in the previous year.

“However , tea prices dropped by 5.3 percent and averaged $1.23 [about K2 153] per kg in 2024 from an
average of $1.30 [about K2 276] per kg in the preceding year.

“Consequently , tea sales proceeds declined to $6.8 million [about K11.9 billion] in 2024 from $7 million [
about K12.3 billion] generated in 2023.”

While attributing the increased production to favourable weather conditions , Tea Association of Malawi
Limited chief executive officer Tonda Chinangwa said the quoted earnings are based on auction prices ,
which are way below export earnings after value- addition.

“In 2023 , total tea exports were 42.5 million kg with a value of over K73.4 billion while in 2024 , total tea
exports were 41.7 million kg with K111 billion.”

She said : “The tea sector is decisively working towards improving both production and productivity by
strengthening smallholder institutions and creating a conducive environment for social dialogue.

“In 2021 , the tea sector welcomed a partnership under Reclaim Sustainability Program , which has
supported the sector to engage with the government for support towards production, market and advancing
decent work.”

The changes in industry practice coupled with research programs targeting modern varieties and
technologies , will result in ethical tea production , which will sustain current markets and open new
opportunities.

Tea Association chairperson Sangwani Hara told a tea testing event in London, United Kingdom last year
that enhanced trade can provide a good alternative to aid and development assistance through increased
exports of products like tea.

(Nation Malawi)
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Tea Exporters Association Sri Lanka
May 2025

TEa SciEncE
Chinese scientists unlock secret to preserving freshness in late-
spring tea
Tea, one of the world's most popular beverages, owes its unique flavor to theanine, an amino acid. Theanine
provides a delicate sweetness that balances the bitterness of catechins and caffeine , while its calming
effects can ease anxiety and promote better sleep.

Theanine levels are high in new tea plant shoots that arise during early spring , but then significantly
decrease in late spring , causing a rapid decline in the quality of green tea processed from the late-spring
harvest.

However , the molecular mechanisms underlying this seasonal decrease in theanine levels remained
unknown for years. Recently, a team led by Professor Zhang Zhaoliang of Anhui Agricultural University has
solved the puzzle through long-term study, with findings published in the journal The Plant Cell.

During spring 's rapid growth phase , tea plants metabolize theanine as a nitrogen source for new shoot
development . First, the CsTHS 1 transporter delivers theanine from the cytoplasm to mitochondria -- the "
powerhouse" of the cell. Then, the CsGGT2 enzyme degrades theanine, lowering its concentration.
Temperature is a key regulator of this process . With seasonal warming ,
both CsTHS 1 and CsGGT 2 increase in tea plants, accelerating theanine
degradation.

By revealing theanine metabolism in tea plants , this study may provide

strategies to improve late-spring tea flavor. "We can use gene editing for
precision breeding , or develop special fertilizers and shading techniques
to maintain theanine levels for smarter cultivation of premium spring teas,"
Zhang said.

(Xinhua)

Researchers brew for UK grown tea

Tea fields may soon rival sheep pastures on the Welsh hillsides, as research suggests the UK could become
a serious player in home-grown tea production.

Researchers are pointing to the viability of growing tea in non-traditional regions , particularly in mid Wales
and south-west England.

Scientists at Aberystwyth University have harnessed machine -learning techniques to analyze the chemical
profiles of tea plants cultivated in areas such as Powys and Dartmoor.

Their work could pave the way for a stronger UK-grown tea industry , helping producers to develop tailored
breeding and cultivation methods that suit local climates.

Tea can be grown in the UK, but there are several challenges that make it more complex than in traditional
growing regions.
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Tea Exporters Association Sri Lanka
May 2025

Due to cooler temperatures, UK-grown tea grows slower than in tropical climates, with the plants preferring
consistent warmth and humidity.

The team is currently collaborating with Dartmoor Estate Tea in Devon , a site chosen for its unique
microclimate and diverse soil types.

The study is examining six varieties of tea selected for their environmental adaptability and chemical
complexity.

Dr Amanda J Lloyd , senior researcher at Aberystwyth University , and her team have also been working
with Buckhall Farm near Knighton in Powys , one of the few UK farms pioneering high -altitude tea
production.

She said: “This study is contributing to the growing field of metabolomics by providing a comprehensive
chemical profile of tea grown in a non-traditional region.

"Our findings offer new insights into the adaptability of tea plants and their potential for cultivation in
emerging regions, contributing to global food security and agricultural diversification."

Further research will now need to be carried out and will include multi-
seasonal sampling and comparisons with traditional tea-growing regions.

It will also include analysis of processed tea to provide a more

comprehensive understanding of tea chemistry.

(Farming UK)

Economy/FinancE
IMF paints a gloomy picture of Iran
Iran is facing one of its bleakest economic outlooks in years, data published by the International Monetary
Fund (IMF ) suggests , with inflation surging , fiscal deficit growing and nominal economy shrinking —all
indicators of potential long-term instability.

Iran’s real GDP is set to grow by just 0.3% in 2025, the IMF's Regional Economic Outlook for the Middle
East and Central Asia published this month projected . That’s a sharp fall in its October 2023 estimate for
this year of 3%.

The revision appears to reflect the tightening of US sanctions under President Donald Trump , who has
promised to slash Tehran’s oil revenues and restrict its access to international finance.

In April alone, the Trump administration imposed eight new packages of sanctions targeting tankers and
trading networks that facilitate the sale of Iranian oil. Between January and April 2025, imports from China
—Iran ’s primary oil buyer —fell to 1.38 million barrels per day (bpd ), about 7 percent below the 2024
average. The IMF estimates both production and exports to fall by 300,000 bpd in 2025.

Iran’s total exports, including non-oil goods and services , is projected to decline by 16% this year to $100
billion, according to the IMF. Imports are expected to fall 10% to $98 billion, leaving a slim trade surplus of
just $2 billion , compared to $10 billion last year. Despite running trade surpluses in recent years , capital
flight remains alarmingly high.
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Tea Exporters Association Sri Lanka
May 2025

Iran ’s Central Bank estimates that $14 billion exited the country in the last nine months of 2024 . That
comes atop $20 billion the year before . Since 2018 , when Trump introduced his so-called maximum
pressure campaign against Tehran.

Perhaps the most shocking of IMF figures is those of Iran’s nominal GDP—which reflects the size of an
economy in global terms . Iran’s nominal GDP will fall from $401 billion in 2024 to $341 billion this year,
according to the report.

The primary reason behind this dramatic fall is the collapse of Iran’s currency, Rial, which lost nearly half its
value in 2024.

While real GDP appears relatively stable domestically as it adjusts for inflation and ignores currency
devaluation, the dollar-denominated figures reveal a steep contraction.

Adjusting for ever-rising prices in Iran, the IMF has upped its inflation estimate for 2025: from 37% in its last
report to just above 43% in the latest.

Iran now ranks fourth in the world in inflation, beaten by Venezuela, Sudan, and Zimbabwe only.

Most troubling for Iran’s government could be the IMF's estimate that the country would need oil prices to
reach $163 per barrel just to balance its 2025 budget. That is more than double the current global average.

In its latest budget , the administration of president Masoud

Pezeshkian has assumed daily oil exports of 1.85 million bpd at $67
per barrel . But the IMF expects actual exports to average just 1.1
million bpd, indicating a substantial shortfall.

The IMF projects Iran’s gross government debt to rise to just under
40% of GDP in 2025 , and a couple of points above it in 2026 —
troubling figures for an economy already under severe external
pressure.

(Iran International)

Ruble steadies at around 80 to Dollar

Russia's ruble steadied around 80 against the U.S. dollar supported by high interest rates, low demand for
foreign currency and the prospect of upcoming tax payments by major exporters.

The ruble has strengthened by over 40% against the dollar this year. Analysts have attributed the rise to the
easing of tensions with the United States under the Trump administration , as well as the Russian Central
Bank's tight monetary policy, which has reduced demand for foreign currency.

Russia 's government last week said it had extended requirements for major exporters to sell a portion of
their foreign currency earnings until the end of April 2026.

Those restrictions , the Russian Central Bank's 21% key interest rate and upcoming tax payments are all
playing in the ruble's favor, said Maxim Timoshenko of Russian Standard Bank.

Month -end tax payments usually see exporters convert their foreign currency earnings into rubles to pay
local liabilities.
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Tea Exporters Association Sri Lanka
May 2025

"The trajectory of the national currency continues to depend largely on the

dynamics of the restoration of demand for imports , as well as geopolitical
and sanctions rhetoric," Timoshenko said.

Meanwhile , the ruble was down 0.4% against the Chinese yuan on the
Moscow Stock Exchange . Russia's Central Bank uses the yuan for foreign
exchange interventions, and it is the most-traded foreign currency in Russia

(Moscow Times)

90% of Iraqi Dinar outside banking sector

Nearly 90 percent of Iraq 's money supply is held outside the formal banking sector , largely hoarded in
homes , a senior financial advisor to the Iraqi premier told Rudaw . The vast “leakage " of cash poses a
serious challenge to the country's financial stability and long-term economic growth.

According to senior financial advisor, the exceptionally high rate of cash held outside banks is largely driven
by public distrust in financial institutions.

Pointing to the unbalanced financial landscape , he noted that "while the economy has ample liquidity ,
banks themselves are liquidity-poor. The government faces similar challenges , and meanwhile , the public
holds large cash surpluses that are effectively idle.”

To reintegrate these hoarded funds into the formal economy , he stressed the need for strategic reforms .
These measures include strengthening deposit insurance through broader advertising and clearer public
communication to reassure Iraqis that their bank deposits are fully insured against any bank failures , the
financial advisor suggested.

Bringing more funds into the regulated financial system, would strengthen the overall economy. "The more
funds there are inside the banking system , the better the situation is than when they are outside the
banking system."

At its core, the sector suffers from a lack of modernization and persistent structural weaknesses. Most Iraqi
banks rely heavily on the Central Bank of Iraq’s foreign currency auctions to generate profit , rather than
engaging in productive investments that stimulate economic activity.

(Rudow)

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