Tea producing countries form association.

Promoting tea is the primary concern of this new association. Unlike the Coffee Producers' Association, this group will not control the market through the regulation of production or prices.

Seven tea producing countries - China, India, Sri Lanka, Indonesia, Iran, Bangladesh, and Malawi

The meeting discussed subjects such as the decline in tea prices, generic promotion, collaborative research among tea producing countries, and the threat to natural tea from artificial substitute products. The following consensus was reached:

* All tea producing countries should supply quality tea to ensure improved prices.

* Generic promotion should be undertaken both in the domestic and overseas markets.

* The Tea Research Institutes of the tea producing countries would meet in Indonesia in September, 1995, to identify areas for collaborative research.

* Seek legal remedies with the assistance of an internationally reputed firm of patent attorneys to counter the threat to natural tea from artificial substitutes.

"There will be no control of the market by regulating production or prices," said R. S. Jayaratne, leader of the Sri Lanka delegation and Secretary to the Ministry of Plantation Industries.

"This is not a cartel. The media reports to this effect are totally unfounded. We will structure the association primarily to promote exchange of information, technical cooperation, and upgrading the product," he added.

Clifford Ratwatte, chairman of the Sri Lanka Tea Board said, "We want to concentrate on subjects where there is a consensus among member countries and avoid contentious issues. We have made a start with seven producer nations and are confident that others will join us soon. We will be sending the draft constitution and the proceedings of the meeting to all producer countries. We will address their concerns and solicit their support to make this organization widely representative of all producer interests."

Dr. Gamini Corea, former Secretary General of UNCTAD told the Tea & Coffee Trade Journal that he welcomed the efforts of tea producing countries to form an association. He was, however, skeptical whether the progressive decline in tea prices could be arrested without addressing the core problem of oversupply. "Producer schemes for supply management have recently been initiated for coffee, cocoa, and tin. It is high time that similar action is taken for tea," said Corea.

A major breakthrough in the deliberations of the meeting is the acceptance by the participating countries of the strategy that generic promotion of tea should be undertaken both in the domestic and identified overseas markets. India and China together have a population of over 2,000 million people. "They hold the key to prices. The per capita consumption of tea in the two countries is low compared with the neighboring countries. If they could increase their consumption of tea through generic promotion by a mere 10%, there will be no oversupply to the export market and an upturn in tea prices could be ensured," said a leading member of the trade.

Tea has a long history of international initiatives aimed at improvement of prices and the quality of the product. Efforts were made under the auspices of the UNCTAD and FAO to forge producer-consumer collaboration to achieve a stable and remunerative price for tea. They did not meet with success.

The International Tea Promotion Association, with membership open only to producer countries, floundered soon after its establishment in 1979. Independent analysts are of the view that for the new association to sustain itself, it would be necessary for: Kenya and other African countries to be prevailed upon to join the organization; the private sector to play a more leading role in the decision-making process in the association, with the state providing a supportive role; cooperation of the trade in the consuming countries to co-fund generic tea promotion programs. After all, the benefits of promotion in consumer markets will accrue more to the trade who owns the branded tea products than to the producers of bulk tea.

Much will depend on how the initial programs and functions of the association are steered by the members. The pitfalls that mired the International Tea Promotion Association would have to be avoided for this new association to survive.

The delegates decided to hold the next meeting in Shanghai, China, in November, 1995. The constitution of the association, the funding arrangements, and the location of the secretariat will be finalized at the next meeting.