tea time

Martin Bauer expansion

China

On the heels of news earlier this year about its opening of a Southeast Asian subsidiary in Singapore, Martin Bauer Group has announced a joint venture deal with a tea company in Hangzhou, Zhejiang, near Shanghai on the eastern central coast of China. The joint venture between Zheijiang ShanShan Tea Co. and MB-Holding will operate under the name ShanShan (Hangzhou) Tea Extracts Co., located in the Economic and Technological Development Area of the city of Hangzhou. The companies are building a factory to produce decaffeinated tea and tea extracts. They plan to begin construction in June of this year and begin commercial production by the end of 2011.

In a statement, the joint venture’s general manager, Liu Zhiming, pointed out two main reasons for the partnership: firstly, growing demand in Asia for the types of products Martin Bauer Group produces, and secondly. a long-standing and good working relationship between the two companies.

"In bringing together the strengths of both companies, we can ensure that ShanShan Tea Extracts Co. is at the leading edge of tea beverage developments in Asia, while at the same time strengthening the position of Martin Bauer Group as one of the leading suppliers of tea extracts and decaffeinated tea to global markets," Liu said.

Bad weather hurts crop

China

Several of China’s principal tea-producing regions have been hard hit by poor rainfall or lingering cold snaps, and production is this year is liely to suffer as a result.

Hangzhou, home of Dragon Well (Long Jing) green tea, experienced its coldest spring for 10 years, and up to 30% of the tea gardens in the West Lake area were affected. Pickinig was delayed, and farmers are expecting to see significant loss of production. Some varietals, such as No. 43, are expected to see a 20% drop from normal output, driving the prices up.

A late frost and cold rain damaged tea shoots in parts of Jiangsu province, and early predictions are that up to 50% of the cop may lost, Prices have already increased by 25% and could rise further.

Kenya seeks tax relief

Pakistan

The Tea Board of Kenya is continuing to press Pakistan to review import duty charged on tea as a means of tackling rampant smuggling of tea across the highly porous border between Pakistan and Afghanistan.

"There is very little we can do in terms of regulating what volume goes into Afghanistan because its an open market system and everyone has a right to buy from anyone, but we have resolved to continue lobbying Pakistan to lower the import duty on tea that enters its market," according to Sicily Kariuki, managing director, Tea Board of Kenya (TBK) quoted in Business Daily. "This will deny smugglers the incentive to engage in the malpractice."

Currently, Pakistan charges a total of 37% on imported tea, in the form of a 10% import duty, sales tax of 15% and 10% value-added tax, plus a further 2% income tax. Tea smugglers, who are widely believed to be connected with terrorist groups, are able to sell their product for significantly less, placing legitimate tea importers at a disadvantage.

Rains help tea

Kenya

Torrential rains that lasted into February may help boost Kenya’s tea and coffee production by up to 10%, according to agricultural economist Peter Kegode, quoted by Bloomberg.

"There has been above-average rain in tea- and coffee-growing areas," Kegode confirmed. "There should be 10% increase in tea production."

The Kenya Tea Development Agency (KTDA), the country largest tea grower, is expecting to see its production increase to 84 million kg of green leaf this year, up from 81 million kg in 2009.

Matcha for Europe

Spain

The Matcha House in Barcelona, Spain, and Aoi Seicha in Japan have launched a wholesale program to deliver matcha to European tea makers and other ingredients users.

The Matcha House recently opened in Barcelona with the mission of making matcha more widely available in Europe. Announcing the new program, the company cited matcha’s widespread use as an ingredient in European pastry and beverages, as well as its increasingly well-known health benefits, as reasons for the launch.

According to the announcement, European companies can contact The Matcha House for industrial- through ceremonial-grade matcha. The Matcha House will source the product directly from Aoi Seicha. A private label program is also available.