China's tea industry at risk

China's tea industry at risk

China is facing a shortage of tea pickers, in part due to a lack of interest among young Chinese people. Many young people are shunning the highly seasonal and labour-intensive work, opting instead for companies that offer a stable year-round salary.

As technology advances, the tea manufacturing process has also become more automated. However, hand-picked tea leaves are still believed to be of higher quality in terms of flavour and aroma.

This nationwide labour shortage has severe consequences for an industry that is key to poverty alleviation in China. Currently, nearly 227 out of 832 poverty-stricken counties are involved in tea production and in nearly 30% of these counties the tea industry is the main source of income for local farmers.

Spring is a very important time of the year for tea industry, as it marks the beginning of green tea season. Longjing tea plantations -- the producers of the high-quality Dragon Well tea grown around the hills of Hangzhou in Zhejiang province -- are usually ready for picking around mid-March and the first batch of tea leaves picked before the Qingming festival is known to be the best.

In China, sales during this season alone account for half of tea sales for the whole year. However, this year the tea trade is facing multiple challenges. Not only is it facing the severe shortage of tea pickers, it also has to deal with the impact of the Covid-19 outbreak, which will reduce the presence of migrant workers and lead to a rise in costs.

There is much at stake, as China's tea industry is expected to produce revenue of more than US$90 million in 2020. By comparison, the Thai tea industry is expected to net nearly $5 million in the same year. Tea producers and marketing bodies in China have quickly put measures in place to reduce the impact on this crucial industry.

In Guizhou province, China's largest tea plantation area, Covid-19 outbreak prevention and control measures have been adopted in tea processing zones with an aim to mitigate the impact on spring tea production. Tea pickers are required to wear face masks and maintain a three-metre separation from each other in the field.

At the same time, tea sales and trade that usually take place at tea markets and malls may also be affected by the epidemic. To tackle this problem, the China Tea Marketing Association has launched an online platform for local governments to recommend tea enterprises and farmers to trade and make sales online. As such, e-commerce will certainly play a more prominent role in China's tea market this year.

Suwatchai Songwanich is an executive vice-president with Bangkok Bank. For more columns in this series please visit www.bangkokbank.com


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