Updated Sep 1, 2022 23:36

Tea Market in China

Market Overview
The Chinese tea market was estimated at $ in , standing approx. at the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price). Overall, consumption saw a prominent increase. Tea consumption peaked in and is expected to retain growth in years to come.

In value terms, tea production dropped modestly to $ in estimated in export price. In general, production, however, continues to indicate a remarkable increase. The growth pace was the most rapid in 2019 when the production volume increased by % against the previous year. Tea production peaked at $ in , and then dropped slightly in the following year.

The average yield of tea in China fell significantly to less than kg per ha in , which is down by % on the previous year. In general, the yield saw a relatively flat trend pattern. The most prominent rate of growth was recorded in 2012 with an increase of %. The tea yield peaked at tons per ha in 2015; however, from 2016 to , the yield remained at a lower figure. Despite the increased use of modern agricultural techniques and methods, future yield figures may still be impacted by adverse weather conditions.

In , approx. less than ha of tea were harvested in China; with a decrease of % on figures. Over the period under review, the harvested area, however, posted prominent growth. The pace of growth appeared the most rapid in 2017 with an increase of % against the previous year. Over the period under review, the harvested area dedicated to tea production reached the maximum at ha in , and then declined markedly in the following year.


Consumption
For the sixteenth year in a row, China recorded growth in consumption of tea, which increased by % to tons in . In general, consumption showed a resilient expansion. Over the period under review, consumption hit record highs in and is likely to continue growth in the immediate term.

The value of the tea market in China rose slightly to $ in , growing by % against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price). Overall, consumption recorded a resilient increase. Tea consumption peaked in and is expected to retain growth in the near future.


Market Forecast
Driven by increasing demand for tea in China, the market is expected to continue an upward consumption trend over the next eight-year period. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +% for the period from to , which is projected to bring the market volume to tons by the end of .

In value terms, the market is forecast to increase with an anticipated CAGR of +% for the period from to , which is projected to bring the market value to $ (in nominal prices) by the end of .


Market Structure
Over the period under review, imports of tea in China were negligibly small compared to the production volumes. Therefore, the share of imports in the total market was practically nonexistent, both in volume and in value terms. This situation has remained constant over the period under review, which means that domestic producers entirely meet the domestic demand for tea. In , the share of imports in total consumption accounted for % in value terms and % in physical terms. The share of imports remained relatively constant over the period under review. In , the share of imports in total consumption accounted for % in value terms and % in physical terms. The share of imports decreased moderately (- percentage point) over the period under review.


Trade Balance
China remains a net exporter of tea; in physical and value terms, exports consistently exceeded imports from 2007 to . In , there was a significant trade surplus of tons, which was equal to $. This tangible trade surplus reflects the fact that the market remains buoyed by domestic production, and the industry is highly incorporated into the global market, which is likely to continue in the medium term.