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UAE continues to be the top tea re-exporter

ABU DHABI - Initial indicators have shown that the UAE is still the top tea re-exporter of the world for the year 2009, and is set to retain the top position it reached in 2004, according to a study conducted the UAE Ministry of Foreign Trade .

The indicators affirm that the UAE continues to play a key role in the international tea trade due to its unique geographic location and provision of competitive logistic and storage services, particularly through the Dubai Tea Trading Center (DCTT) in Jebel Ali Free Zone, one the most important international tea re-export hubs, said the Ministry in a press release.

The UAE is a major intermediary for tea production centers and consumer markets. It provides added value to the industry through several centers, the most important of which is the DCTT. Reporting to the Dubai Multi-Commodities Center, DTTC was established in 2005 in a strategic location near Dubai’s seaports in order to provide facilities for all international producers and purchasers. It maintains a central facility for storing, mixing and packaging tea as well as a dedicated office for tea companies and special units such as ‘The Tasting Unit’ which sorts different types of tea.

DTTC imports tea from 35 Asian and African countries. It is one of main re-export hubs in the world, storing tea for the 13 tea-producing countries of Kenya, India, Sri Lanka, Indonesia, Malawi, Rwanda, Tanzania, Zimbabwe, Ethiopia, Vietnam, Nepal, China, and Iran.

The study conducted by the Ministry of Foreign Affairs has revealed that the UAE came first internationally in tea re-exports during the period between 2004 and 2008 and was one of the top five exporting countries, placing second in 2007 and 2008.

The study showed that the UAE’s tea re-exports accounted for 72 percent of the global figure in 2008 at USD 112 million, with the US coming in second at 9 per cent. Hong Kong contributed 8 per cent, while Kenya and Canada each accounted for 3 per cent. The Emirates contributed 73 percent in 2007 at USD 95 million; 66 percent in 2006 at USD 85 million; 71 percent in 2005 at USD 87 million; and 56 percent in 2004 at USD 50.4 million.

Results showed that international tea re-exports for 2008 increased by 18 per cent over 2007 to reach USD 155 million, while re-exports grew 240 per cent to hit 153 million kg. The UAE’s imports were valued at around USD 452 million in 2008, surpassing the 2007 figure by 39 percent, which was twice the growth of international imports at 15.6 percent. The volume of tea imports was estimated at 110 million kg, representing a 12 percent growth and exceeding the international growth rate of 8.8 percent.

Sri Lanka, one of the most important tea importers for the UAE, contributed around 34 percent from 2006 to 2008, followed by India at 11 percent during the same period. Imports from the two countries were found to be decreasing and giving way to other countries; the percentage of their contributions slid from 50 percent in 2006 to 40 in 2008, indicating the diversifying import sources of the UAE.

The study also showed that the UAE’s total tea exports reached USD 115 million in 2008 at a growth rate of 18 percent over 2007’s USD 96 million. This equals the international growth rate during the same year.

Around 91 percent of the geographic distribution of UAE re-exports was directed at two countries: Iran at 49 percent and Iraq at 42 percent. The study underlined the risk of export centralization into these countries, especially as each has its own political and security issues. This requires a search for new markets in order to maintain the UAE’s leadership in tea re-exports.

Finally, the study stated that international tea imports reached USD 4.511 billion in 2008 to increase by 15.7 percent over 2007. Exports, on the other hand, were valued at USD 5.204 billion to grow 17.5 percent over 2007.