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UAE World’s Leading Re-Exporter of Tea from 2007 – 2011, the 5th Global Re-Exporter of Coffee

Abu Dhabi: The UAE is a central global hub in the tea re-export market, according to the report issued today by The Ministry of Foreign Trade, on the occasion of the “International Coffee and Tea Festival”, which is scheduled to begin in Dubai on the 30th of October, 2012.

The study found that during the past five years (2007 – 2012), the UAE was the world’s foremost re-exporter of tea, with a 60 percent share of the world’s tea re-export market, with a share that was valued at around USD 48 million in 2011.

The study, which was conducted by Economic Advisor, Dr. Abdel Hamid Radwan, under the supervision of Dr. Mattar Ahmed, Head of the Analysis and Trade Information Department, pointed out that the UAE is among the world’s top five tea importers, occupying second place from 2007 – 2011, with the exception of 2009, when it ranked in the 3rd place after the UK.

Moreover, it pointed out that UAE tea imports have risen by around 50 percent during the same period, from USD 324 million in 2007, to USD 485 million in 2011, and that the country’s share of total global tea imports has also grown from 8.3 percent in 2007 to 9.4 percent in 2011.

The study identified Sri Lanka as the UAE’s top supplier of tea, providing the UAE with around 20 percent of its tea imports from 2010 – 2011. The South Asian island state was followed by India, with an 8 percent share of the UAE’s tea imports during the same period. However, both countries’ combined share declined in favor of other world countries from 30 percent in 2010 to 26 percent in 2011.

It also revealed that the UAE’s tea exports were around USD 5.7 million in 2011 – up by 68 percent from 2010 – while re-exports of the commodity decreased by 14 percent during the same period, negatively affecting total exports with a 10 percent decline. The study showed that nearly 85 percent of all UAE re-exports were to two main destinations, 81 percent going to Iran and 4 percent to Oman in 2011, calling for the exploration of new markets to maintain the country’s advanced standing in the tea trade.

The study also revealed that the global tea imports were USD 5,704 million in 2011, up by 37 percent from 2010, with Russia being the foremost importer of tea during 2007 – 2011, importing USD 625 million worth of tea in 2011 (up by 11 percent from 2010). The UAE came in the second place during the same period – with the exception of 2009 when it came in third place after the UK.

The study also revealed that global tea exports in 2011 were around USD 6,349 million, up by 3 percent from 2010, registering however a 5 percent decrease in quantity. During the last five years (2007 – 2011), Sri Lanka was that the world’s foremost tea exporter, with a 22 percent share of the commodity’s global exports, followed by Kenya (with an 18 percent share).

The world’s 5 top tea exporters together hold a 70 percent share of the world’s tea export market, which reflects a export concentration vulnerability as global supplies could be adversely affected in the event of the occurrence of droughts and other production affecting phenomenon.

The study added that the global tea re-exports were USD 99 million in 2011, down by 12 percent in 2010, with a 15 percent decline in quantity during the same period. This may be attributed to the international economic ramifications of the EU crisis. During the past five years, the UAE was the world’s foremost tea re-exporter, holding a 60 percent share of the tea re-export market from 2007 – 2011.

It also showed that the global re-exports of coffee were USD 349 million in 2011, with the USA holding the biggest share in this market (USD 238 million), while the UAE came in fifth place in this regard with USD 6.2 million in coffee re-exports at a growth rate of 32 percent from 2010 – 2011.

The study pointed out that the tea, in its raw form, requires storage time and packaging services, creating a role to be played by a number of countries as value adding intermediaries between production and consumption centers. The UAE, through the Dubai Multi Commodities Centre (DMCC) – established in 2005 near Dubai’s ports – provides global tea producers and importers with all sorts of tea trade enabling facilitations that include a large tea storage facility that is also equipped with the means to mix and package the commodity. It is also home to many tea company offices.

The facility also has many other divisions such as the “tasting unit”, which categorises tea arriving to the UAE from 35 Asian and African countries. The center is considered one of the world’s most important tea re-export industry hubs, storing the tea shipments of many world countries.