Tea

World tea production is projected to increase from the 1993-95 average of 1.97 million tonnes to 2.7 million tonnes in 2005, an annual average growth rate of 2.8 per cent. Production in India is estimated at 1.02 million tonnes in 2005, an average annual growth of 2.8 per cent from the 1993-95 base.

Most of the envisaged production expansion in Sri Lanka should result from the recent economic reforms and the national plan for tea production expansion.

Production by 2005 is projected to reach 285 000 tonnes, compared to 240 000 tonnes during 1993-95, an annual growth rate of 1.6 per cent.

Significant growth in production is also projected for other major tea-producing countries. China and Indonesia would increase black tea production for 1,80,000 tonnes and 1,05,100 tonnes to 2,20,000 tonnes and 1,60,000 tonnes, respectively.

Output of tea in Bangladesh would grow only moderately from 49,000 tonnes in 1993-95 to 55,000 tonnes in 2005. Increases in both yields and planted area are likely to continue to support the strong growth in tea production in African countries. Output in Kenya is expected to increase at an average annual rate of 2.8 per cent to 3,00,000 tonnes in 2005.

World black tea consumption is projected to increase from 1.97 million tonnes in 1993-95 to 2.67 million tonnes by 2005, an annual growth rate of 2.8 per cent. Developing countries the 1993-95 average of 1.41 million tonnes to 1.95 million tonnes by 2005, an annual growth rate of 3.0 per cent.

Black tea consumption in India is projected to continue to rise rapidly, reaching 8,32,000 tonnes by 2005, an annual growth of 3.2 per cent from the base period. In other major markets for black tea such as Pakistan, the Islamic Republic of Iran and Egypt, consumption is projected at 1,60,000 tonnes, 1,22,000 tonnes and 90,000 tonnes by 2005, respectively. The reduction of import tariffs and declining prices could have a more pronounced effect on consumption in these countries.

Coca

In 2001/02 world cocoa production is expected to recover to the level of 1999-00 as a result of more favourable weather conditions in West Africa. Concerns over potential supply disruption from Cote d’Ivoire should also be diminished if the proposed new marketing system that includes minimum guaranteed producer prices is implemented.

Producer prices fell sharply after the liberalization of the sub sector in 1999 which coincided with the collapse of the world market prices. Current increases in the world market prices, even though small, have led to improved producer prices.

Cocoa prices rose in June this year to a new 15-year high in London and to a new four-year high in New York owing to shortage on the September contract, ahead of the harvest of the Ivory Coast crop.

The weakness of dollar, which benefits European importers, was cited as an additional factor helping to prop up the market. The cocoa market has been firm for several months, thanks to two successive seasons when the demand has outstripped the supply.

Global production is anticipated to grow at a rate of approximately 1.7 per cent per year, from 1993-1995 to 2005. This compares to 3.5 per cent growth during the preceding 10 years.

Output in 2005 is projected to reach 3.08 million tonnes, with Africa accounting for 65 per cent, an increase in share of about 5 per cent from the base period.