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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Indonesia's tea industry in decline

Wednesday, December 10, 2014 > 09:21:39

(Jakarta Post)

Unfair trade rules have led plantation owners to destroy more than 2,500 hectares (ha) of tea plantations and replace them with other, more profitable commodity crops, leading Indonesia’s tea industry to the brink of collapse, an expert has warned.

“For quite a long time now we have wanted to gather and examine what has gone wrong with our tea trade rules,” said Rachmad Gunadi, director of tea plantation Pagilaran Yogyakarta, over the weekend.

He was speaking during a press conference ahead of Jogja Tea Party 2014, which is set to take place in Yogyakarta from Dec.12 to 14.

Rachmad said unfair trade rules had led Indonesia’s tea industry to continued decline. “During the last five years, Indonesia’s tea production has continued to decline while imports of tea have increased significantly,” he said.

In 2012, tea production reached 137,247 tons, down from 142,342 tons in 2011 and 152,589 tons in 2009. Exports of tea reached 70,071 tons in 2012, down from 75,450 tons in 2011 and 92,304 in 2009.

Meanwhile, the amount of imported tea reached 24,397 tons in 2012, up from 19,812 tons in 2011 and 7,164 tons in 2009.

“We predict that our tea production will decline further because one big tea plantation has just destroyed its 5,000 hectares of tea trees and replaced them with fruit crops deemed to be more profitable,” said Rachmad.

Annually, he said, Indonesia had lost 2,500 ha of tea plantations during the last five years, causing constant declines in its position among the world’s biggest tea producing countries.

“Indonesia now ranks seventh, from a previous ranking of fifth, of the world’s biggest tea producing countries. We have been overtaken by Turkey and Vietnam,” said Rachmad.

“There is something wrong with our tea trade rules. We have exported all of our quality tea products saying that they cannot be absorbed by our domestic market. Ironically, we let imported premium tea products flood into our market. [...] imported premium tea products that are very expensive actually use local tea leaves that we export as their raw materials,” said Lily Gunawan, director of tea manufacturer PT Gunung Subur.

The Jogja Tea Party 2014, jointly held by the Indonesian government and tea industry business players, is aimed at identifying root problems affecting the country’s local tea industry and expanding its markets within domestic consumers.

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