For local tea producers, 1997 a bad year<\/p>\n
By Sylvia Gratia M. Nirang<\/p>\n
JAKARTA (JP): This year has been considered a bad year for
\nIndonesian tea, as the output is estimated to drop and the
\nbusiness is facing a land shortage.<\/p>\n
Executive secretary of the Indonesian Tea Association Moeljono
\nPartosoedarso told The Jakarta Post that Indonesia's tea
\nproduction was expected to fall sharply by over 20 percent due to
\nthis year's severe drought caused by the El Nino weather
\nphenomenon.<\/p>\n
\"We estimate output to be slightly over 110,000 tons or down
\nabout 20 percent from last year's output of 144,000 tons,\"
\nMoeljono said.<\/p>\n
He said East Java, one of the biggest tea-producing areas in
\nIndonesia, was the most affected province. Its tea production
\ndropped by about 40 percent this year, also due to the drought
\ncaused by El Nino.<\/p>\n
El Nino, named after the Christ child by Peruvian fishermen,
\nis a phenomenon which causes unusually warm Pacific Ocean
\ntemperatures off the coast of South America and occurs every two
\nto seven years.<\/p>\n
It normally peaks around December and can affect weather
\nconditions worldwide.<\/p>\n
But this year, the phenomenon arrived early and nearly matched
\nthe century's worst El Nino in 1982\/1983, which blighted crops in
\nIndonesia, Australia, the Philippines and southern Africa after a
\nblistering drought.<\/p>\n
Indonesia is currently the world's fifth biggest tea producer,
\nproducing about 144,000 tons last year.<\/p>\n
Indonesia's main tea-producing areas are West and East Java
\nand North Sumatra.<\/p>\n
Indonesian tea producers are also facing difficult times due
\nto high pressure placed on them by property developers and other
\nagricultural commodities.<\/p>\n
\"Some private and small estates have been converted into
\nresidential areas and horticultural areas,\" he said.<\/p>\n
But he declined to give further details about the total
\nacreage that had been converted.<\/p>\n
According to the association's data, tea plantations in
\nIndonesia currently cover about 160,529 hectares. About 61,464
\nhectares are owned by small plantations, 54,795 hectares by
\nstate-owned plantations and the remaining 44,270 hectares by
\nprivate estates.<\/p>\n
The productivity rate of state-owned tea estates has been an
\naverage 2.3 tons a hectare per year since 1992, against the small
\nholders' productivity rate of less than 0.5 tons per hectare.<\/p>\n
\"Some tea companies and exporters no longer consider the tea
\nbusiness profitable, so they change their businesses into more
\nprofitable ones, such as ones dealing with horticulture or palm
\noil,\" he said.<\/p>\n
\"A lot of private tea estates have been neglected by their
\nowners because the owners do not want to spend money to maintain
\nthem,\" he said.<\/p>\n
\"It will threaten tea development in Indonesia in the coming
\nyears,\" he said.<\/p>\n
Moeljono estimated next year's tea output would remain under a
\ncloud due to the severe drought and the shrinking tea plantation
\nareas.<\/p>\n
\"I estimate Indonesia's tea production will continue to drop
\nat least 10 percent due to the prolonged dry season and high
\npressure on tea business,\" he said.<\/p>\n
The London-based International Tea Committee's data puts 1996
\nworld tea output at 2.61 million tons, compared to 2.58 million
\ntons in 1995.<\/p>\n
India ranked first last year with an output of 780,034 tons,
\nfollowed by China with 593,386 tons, Sri Lanka with 258,969 tons,
\nKenya with 257,162 tons, Indonesia with 144,000 tons and Turkey
\nwith 114,540 tons.<\/p>\n
Export<\/p>\n
Although Indonesia faced a decline in tea production this
\nyear, its tea exports were estimated to remain stable at about
\n100,000 tons, Moeljono said.<\/p>\n
He explained that Indonesia's tea exports were estimated to
\nremain stable because the country's per capita tea consumption
\nwas still very low, at about 200 grams per year.<\/p>\n
\"A habit of Indonesian families is to use the same tea bag
\nseveral times over to make drinks,\" he said.<\/p>\n
The country's export of tea from January to May this year
\ntotaled US$52.92 million.<\/p>\n
Last year, Indonesia exported 101,532 tons of tea, worth
\n$112.34 million. Some 97,200 tons of which was black tea and the
\nremaining 4,325 tons green tea.<\/p>\n
About 23,500 tons of tea was exported to Pakistan, 11,000 tons
\nto the U.S., 10,400 tons to the United Kingdom, and 10,000 tons
\nto Russia. The rest was sent to other European countries and the
\nMiddle East.<\/p>\n
Moeljono said major tea producers, like India, Sri Lanka,
\nChina and Kenya, did not consider Indonesia a threat because it
\nonly accounted for 5 percent of the world's total output and 7
\npercent of the world's total exports.<\/p>\n
Although Sri Lanka is the world's third biggest producer after
\nIndia and China, the country is the biggest tea-exporting country
\nin the world.<\/p>\n
He said some of Indonesia's well-known brands of tea also
\nincluded some imported Chinese tea mixed into them.<\/p>\n
\"Some tea producers want their products to be exclusive, so
\nthey mix them with Chinese tea for a different taste compared to
\nother brands. It's common in high-class tea products,\" he said.<\/p>\n
Prices<\/p>\n
Moeljono said tea prices in the world market were increasing
\ndue to a decline in output of some major tea-producing countries
\nlike Kenya, India and China.<\/p>\n
The drought had also damaged tea plantations in Kenya and
\nIndia and some floods had done some damage earlier this year in
\nChina, he said.<\/p>\n
He said average tea prices had increased 50 percent in two
\nyears, over $2 a kilogram this year from $1 in 1995, at the
\nJakarta tea auction.<\/p>\n
\"High quality tea sold for $2.50 a kilogram this month,\" he
\nsaid.<\/p>\n
Tea demand in the international market has significantly
\nincreased in the last few years and the surge in demand has
\npushed up commodity prices.<\/p>\n
He said tea prices in the local market were also being kept
\nhigh by the sharp decline of the rupiah's value against the U.S
\ndollar.<\/p>\n
The monetary crisis, triggered by the devaluation of the Thai
\nbaht in early July, has caused the value of the rupiah to drop by
\nmore than 50 percent against the dollar.<\/p>\n
He said medium quality tea was about Rp 20,000 per kilogram
\nwhile low quality was Rp 10,000 per kg in Jakarta this month.<\/p>\n
He said some high quality tea had been sold in the local
\nmarket this year, as some local tea industries produced high
\nquality tea.<\/p>\n
\"It's a good development, because in the past few years, high
\nquality tea has always been exported,\" he said.<\/p>\n
But he predicted a fall in tea prices next year due to the
\nincrease in production in some countries which were unaffected by
\nEl Nio, like Sri Lanka and Egypt, and the decline in demand in
\nsome European countries and developing countries, like Pakistan,
\nIran and Saudi Arabia.<\/p>\n
Policy<\/p>\n
Moeljono said Indonesian tea businesses would continue to face
\na difficult period next year.<\/p>\n
He said the government has stopped its efforts to encourage
\ntea output and export due to the currency crisis.<\/p>\n
\"During the current monetary crisis, the government is
\nfocusing its efforts on boosting the export of commodities which
\nhave very high potential and value,\" he said.<\/p>\n
He said the government had stopped supporting tea production,
\na decision which had made tea businesses suffer.<\/p>\n
The secretary-general of the Ministry of Agriculture,
\nSjarifuddin Karama, said earlier this year that the government
\nwould continue its policy of restricting the expansion of tea
\nplantations despite an increase in world demand.<\/p>\n
\"The restriction will remain in effect for an indefinite
\nperiod of time,\" he said.<\/p>\n
The government has prohibited state-owned and private estates
\nfrom opening and expanding or opening new plantations since 1992
\nin a bid to maintain tea prices, which at that time had a
\ndownward trend.<\/p>\n
Table: Indonesia's production and export of tea, 1991-1997<\/p>\n
Year Production Export<\/p>\n
(tons) Volume (tons) Value (US$1,000)<\/p>\n
1991 133,421 110,218 143,130<\/p>\n
1992 145,685 121,243 140,823<\/p>\n
1993 136,588 123,926 155,696<\/p>\n
1994 135,807 84,915 96,091<\/p>\n
1995 145,422 79,297 87,709<\/p>\n
1996 144,000 101,532 107,380<\/p>\n
1997* 110,000 100,000 120,000<\/p>\n
* Projected<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/for-local-tea-producers-1997-a-bad-year-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }