Tea producers predict another gloomy year

Tea producers predict another gloomy year

JAKARTA (JP): Local tea producers have predicted another
gloomy outlook this year as overwhelming supply in the world
market would continue to depress tea prices.

The Indonesian Tea Association's chairman, Rachmat Badruddin,
said on Friday that tea output was currently exceeding its demand
and would result in weakening prices.

"Since 1998, world tea output has exceeded demand, mainly due
to an increase of 70,000 metric tons from Kenya, the world's
fourth-leading tea producer, while the world's carry-over stock
is still abundant due to the drop in demand," he said during a
breaking of the fast gathering.

"It is predicted that in 1999, world tea production will
outstrip demand for the second year running, helped by likely
record supplies from major producing countries such as India,
China and Kenya."

Rachmat predicted that Indonesia's tea production would reach
160,000 tons this year, the same level as last year's, 128,000
tons, 80 percent, of which would be exported.

Indonesia is currently the world's fifth-biggest tea producer,
after India, China, Sri Lanka and Kenya. The country produces
around 150,000 tons annually.

Indonesia's main tea producing areas are West Java, East Java
and North Sumatra.

Last year, Indonesia exported 101,532 tons of tea worth US$120
million, 97,200 tons of which was black tea and 4,332 tons green
tea.

The country exported most of its tea to Pakistan, the United
States, the United Kingdom and Russia. The rest was sent to other
European countries and the Middle East.

According to the association's data, tea plantations in
Indonesia currently cover 160,529 hectares: 61,464 hectares are
owned by small plantations, 54,795 hectares by state plantations
and 44,270 hectares by private estates.

Rachmat said that local tea producers enjoyed a windfall
income from increasing tea prices in the domestic market last
year due to a weakening of the rupiah against the U.S. dollar.

Low quality tea is currently traded at between Rp 5,000 and Rp
6,000 per kilogram, he said.

The price is considered good, although it is still lower than
last year's price which reached Rp 10,000 per kilogram, he said.

Rachmat said that a windfall in exports could not be enjoyed
by local tea producers due to their low productivity and
efficiency.

The productivity rate of state tea estates has been an average
2.3 tons a hectare per year since 1992, against the small
holders' productivity rate of less than 0.5 tons per hectare.
(gis)