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Tea leaves tell of diverging fortunes

Friday, September 06, 2013 - 02:01

Sept. 6 - African tea producers are feeling the heat as the crisis in Egypt impacts demand. But as low grade tea takes a hit, high-end tea prices are on the rise, fuelled by a growing thirst for luxury. Ivor Bennett reports.

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PLEASE NOTE: RESENDING VIDEO WITH REPORTER STANDUP A cuppa for a connoisseur. This tea is known as Darjeeling first flush. It's made from the first new leaves of the season, and is available only once a year. SOUNDBITE (English) EAST INDIA COMPANY TEA MASTER, LALITH LENADORA, SAYING: "It's very very popular amongst the tea lovers. It's known as champagne tea in India. Best of the best teas." Lalith Lenadora is tea master at London's East India Company, tasting over 100 cups of tea a day. At £30 for 100 grams, this particular brew doesn't come cheap. Others here cost even more - some selling for over £1000 per kilo. But despite the high price, demand is soaring, with producers India and China cashing in. Chief Operating Officer Manan Bhansali says Indian premium grade prices have doubled in the last year because of a growing thirst for luxury. SOUNDBITE (English) EAST INDIA COMPANY CHIEF OPERATING OFFICER MANAN BHANSALI, SAYING: "People are much more interested in the tea that they're drinking. They're much more knowledgeable about tea. So the similar process that wine has gone through over the last 20 or 30 years, tea is sort of going through a similar renaissance." SOUNDBITE (English) REUTERS REPORTER IVOR BENNETT, SAYING: "The majority of the tea we actually drink in the UK though is of a much lower grade. The stuff in tea bags for example is a blend mostly from Africa, where prices are falling fast." Demand for African tea's been hit by the ongoing crisis in Egypt. The country ranks as the 6th biggest tea drinking nation in the world, behind China, India, Russia, the UK and Pakistan. On top of that, a bumper harvest in Kenya has led to a glut of supply. Wholesale prices have plunged by more than a third in the last year, hitting 2 dollars 64 per kilo last week - their lowest in three years. As a major exporter, Kenya's economy could suffer, with prices expected to fall even further. Compared to the top of the market their fate couldn't be more different.

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Tea leaves tell of diverging fortunes

Friday, September 06, 2013 - 02:01