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Coffee and Tea Reports from the Front Lines

Tea at risk of losing market

Vietnam - According to a report that appeared in the Vietnam Economic Times, the target for the country’s tea industry in 2005 was to export 950,000 tons of tea, earning $107 million. However, it reached only $88 million. Experts say the industry is at risk of losing market.

Moreover, this industry still focuses on a small number of markets like Taiwan, Pakistan, Malaysia and Russia. That means market diversification is still required. Droughts last year caused reduction in tea leaf production while capacity of tea processing plant was large, causing tea leaf shortages.

Vietnamese tea exporters did not have a long-term strategy in seeking for export market. Several importers started to buy the same product but with higher quality and lower prices from other countries.

Last year, the Vietnam Tea Association announced the national brand for tea “Cheviet.” However, how to improve quality of the product with this brand still remains a big question.

The industry set a target of exporting 120,000 tons of quality tea, earning $200 million by the year of 2010 and creating as many as 1 million jobs for people.

1970’s band, KISS, to open coffeeshop

USA - The first KISS Coffeehouse will make its debut at Broadway at the Beach in Myrtle Beach, Florida in the Spring. Kiss is an American rock band, very popular in the 1970’s and 1980’s.

Brian Galvin, a devoted fan who developed the coffeehouse idea, told The Sun News, “This concept is a little different. It’s a stimulating environment to drink a stimulating beverage.”

The coffeehouse will fill a 1,305-sq. ft. corner space at Celebrity Square. It will open sometime this spring or early summer. Officials didn’t give an exact date. Galvin said band members Gene Simmons and Paul Stanley plan to attend the grand opening.

Myrtle Beach offers the perfect stage for a KISS Coffeehouse, Galvin told the newspaper, because of its appeal to the “Middle America” market, the segment likely to “Rock and Roll All Nite.”

If the KISS-themed coffee blends and sweets back up the eye-catching entrance, the coffeehouse will do well, said Pat Dowling, spokesman for Burroughs & Chapin Co. Inc., which owns Broadway and prides itself on family values.

Galvin plans to open more locations, possibly one in Las Vegas, if this one is a hit, he said.

Second Annual eCafé Ethiopian Cooperative Coffee Competition Set

Ethiopia - The Second Annual eCafé Foundation Ethiopian Gold Cooperative Coffee Competition is set for February 20-24 at the central liquoring lab in Addis Ababa, Ethiopia. Judges from six countries will rate nearly 200 coffees from five cooperative unions representing Ethiopia’s top growing regions: Yergacheffe, Sidama, Kafa, Tepi and Bench Maji. Awards will be given to 12 washed and 12 unwashed coffees.

Besides being honored by the judges, the winning coffees will be included in the eCafé internet auction slated for April 2006. Last year’s auction generated more than $187,800 for the farmers, at an average price of $3.22 per pound, compared to the market price of $1.30 per pound.

For the second straight year, eCafé is working closely with ACDI/VOCA - an economic development firm that works to improve lives and livelihoods worldwide - to administer the country’s coffee competition. Since 1997, ACDI/VOCA has empowered Ethiopian smallholder farmers by helping them form competitive, profit-oriented, professionally managed cooperatives. Many of the co-ops have excelled at coffee production, and one produced coffee last year that Starbucks named its eighth Black Apron Exclusive. ACDI/VOCA’s project has been funded by the U.S. Agency for International Development.

Following last year’s event, a traditional Ethiopian Coffee Ceremony featuring eCafé winning coffees was hosted by the Ethiopian Ambassador to the United Nations at the UN headquarters in New York City.

IIM(C) to Make Model for Tea Board

India - The Tea Board of India has appointed Indian Institute of Management (Calcutta) as consultant for developing a model on consumption pattern of the beverage in the country, its chairman Basudeb Banerjee said.

Banerjee told The Economic Times of India that approval for appointment of IIM(C) had been cleared.

The Tea Board official said the premier business school would develop an econometric model for consumption pattern based on secondary data obtained from National Sample Survey Organization (NSSO).

Banerjee said that the main purpose behind developing the model is to make figures related to consumption more authentic in nature. Besides, the tea industry is also worried about the stagnating domestic consumption levels in view of declining exports which was affecting the trade in both ways.

IIM(C) is expected to submit a report within four months, by which the consultant would also come with an interim set of suggestions. Banerjee said that the industry had also demanded that Tea Board commission a study to map the reasons for slowing down of domestic consumption.

During the period January - October 2005, prices for north Indian tea reflected a decline of Rs 8.62 per kg, the fall was to the tune of Rs 3.50 per kg for south India.

ITA has projected imports of tea at 20 million kgs for 2005, while 13 million kgs have been already imported during January to October, as compared to 23 million kgs in 2004 in the same period.

Nyayo Tea Zones to Build New Factories

Kenya - The Nyayo Tea Zones Development Corporation plans to build two tea factories this year.

The East African (Nairobi) reports that the factories, one in Nandi and the other in Embu districts, are expected to ease the pressure on Kenya Tea Development Agency (KTDA) factories, which currently process leaf for the corporation.

Nyayo Tea Zones managing director, Dr. Anne Kinyua said that the corporation is to begin construction of its first factory, at a cost of Sh311 million, in February in Nandi district within the zone’s West Rift Valley belt. The second factory is planned for Embu in the East Rift Valley area.

Dr. Kinyua said the earnings will likely increase when the corporation starts processing its own tea and marketing value-added produce to local and international markets.

The corporation was set up in 1986 to grow tea in 100 meters belts around forests in tea-growing zones, which would act as buffer zones to check encroachment on forests. It has since established a total of 17 zones and its green leaf output is expected to rise to 26 million kg by 2010.

The National Environment Management Authority has given the Nandi Zone a clean bill of health, paving the way for the plant, which is expected to be fully operational in 2007.

She said construction of the factories will go hand in hand with the planting of trees in the forests bordering the zones. The reforestation will be funded by the African Development Bank at a cost of Ksh3 billion ($40.5 million) and is scheduled to in 2006.

In the areas earmarked for tea zone development, some 2,800 hectares of tea and 2,000 hectares of trees have been planted. Within the next three years, the corporation is planning to plant another 2,000 hectares of tea, 5,000 hectares of fuelwood and 500 hectares of indigenous trees.

Tea & Coffee - February/March, 2006


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