Fri, 25 Jul 2008
From: The Jakarta Post
By Novia D. Rulistia, The Jakarta Post, Jakarta
Indonesia's tea exports may increase 8 percent this year on the back of stronger demand, an industry player says.

The national tea council chairman Abdul Halik said Tuesday tea shipments this year may increase to 102,600 tons of green and black tea from 95,000 tons shipped out last year.

"International demand for our tea will likely increase as demand for tea from Kenya and Srilanka -- the world's largest tea exporters -- is predicted to decrease this year," he said.

The country mostly ships the commodity to countries in Europe, the Middle East, the United States and Eastern Europe.

Indonesia, the world's sixth-largest tea producer, holds six percent of the global tea market, trailing Vietnam, which has 7 percent, India at 13 percent and Kenya and Srilanka, which both hold 20 percent, according to the council.

However, Halik said domestic demand would likely remain constant as Indonesians were yet to view the drink as anything more than a refreshment, where other countries also drank it for its medicinal purposes.

"Despite the (world wide) boom in green tea, domestic tea consumption in Indonesia is still low at around 300 grams per capita per year, as compared with, for instance, the 2.5 kilogram per capita annually in the UK."

Tea can also be used as an ingredient in cosmetics, including lotion, shampoo and toothpaste.

The country's tea production this year is predicted to be 160,000 tons, but Halik said product quality remained a problem.

"One of the biggest problems in our tea industry is that the quality of our tea is still low due to low maintenance, especially at public plantations," Halik said, adding that 30 percent of the country's tea plantations needed rehabilitation.

Due to the poor quality, the current average price of Indonesian tea is only US$1.34 per kilogram, cheaper than tea from Srilanka, which is priced at $1.8 per kilo, and Kenya, at $2 per kilo.

Indonesia produced 167,000 tons of tea last year, 23 percent of which came from public plantations, 54 percent from state-owned plantation firm PT Perkebunan Nusantara and 23 percent from private companies.

Indonesia has 136,000 hectares of tea plantation, with the largest area in West Java, followed by Central Java and North Sumatra.

The country may experience a decline in production compared to last year due to lack of fertilizer supply, Halki said.

"The supply of fertilizer seems to be limited as most of the fertilizer goes to the agriculture sector in line with the food sustainability program," he said.



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