China’s Tea Industry Growth is Seemingly Unstoppable

Last year saw continued growth for the global tea industry, in terms of overall production and exports from tea-producing countries. Along that same pattern, China saw expansion in tea acreage, production, and exports. The growth in 2024 further secured China as producer of over half of the world’s tea, the top green tea producer, and the nation’s western provinces as the largest tea-producing segment within the country. Tariffs and trade relations with the United States may affect a thin slice of China’s global tea trade, but increasing domestic consumption and the strength of larger, more critical export markets
can easily dwarf these trade war concerns.

China’s Production Grows 12 Percent

Global tea production rose by 6.8 percent over the previous year, from 6.6 to 7.1 million metric tonnes (mmt). China accounted for 53 percent, or 3.7mmt, of global production volume while increasing its own production by 12 percent over the previous year. India took second place with 18.2 percent even with a production drop of 6.1 percent. The industry watched intently, as the Assam region particularly saw a shortened sea son and reduced yields. Kenya rounds out the top three producers with 8.5 percent of the world’s annual production. Taken together, these three producers account for 80 percent of global production for 2024.

Other major tea-producing countries saw shifts in production levels. Türkiye edged out Sri Lanka to become the fourth largest producer by volume. Bangladesh saw a 9.6 percent drop in production, which coincided with civil unrest and the overthrow of the Bangladeshi government. Argentina, a significant source of black teas for the US market, saw a recovery, increasing its production levels by 19.1 percent over the previous year. Overall global tea production levels are expected to continue rising.

Unlike the other main tea-growing countries, China is primarily a green tea producer. 55.1 percent, or 2.1 mmt of China’s 2024 production was green tea, followed by 0,51 mmt of black tea. This green tea alone accounts for 29.1 percent of 2024 global tea production. The remainder of China’s tea is dark (hei) 12.7 percent, wulong 8.9 percent, white 2.5 percent, and yellow tea at 0.8 percent. In 2019,black tea surpassed dark tea as the second-largest segment of tea production. Since then, production volumes of the two have remained fairly close. The broader popularity of black tea, along with growing domestic demand for RTD teas and black tea’s relatively high average export price speaks in favour of further gains in black tea production share. Black tea has also become increasingly important to China’s domestic market, especially with the rapid growth and popularity of bubble teas and other
beverages that are part of what has been termed the “new-style tea beverage” industry.

At time of publication, official data on production levels at the provincial level were incomplete, and only estimates were available. Based on these values, China’s top four tea producing provinces (Fujian, Yunnan, Sichuan, and Guizhou) accounted for half of China’s tea production, and they each showed increases in volume of between 2 and 7 percent. Preliminary data also showed double-digit gains in
production by Anhui and Shaanxi provinces, but these numbers are pending confirmation.

Yunnan narrowly beat out Fujian to become the largest tea-producing province, further enhancing the Western Belt’s (Yunnan, Sichuan, and Guizhou provinces) position as the dominant tea producing segment. These Western provinces contribute a combined total of over one-third of all Chinese tea, 19 percent of total global tea. The Eastern Belt (Fujian, Anhui, and Zhejiang) and Central Belt (Hubei, Hunan, and Shaanxi provinces) each produce about 25 percent of China tea each year.

As with production data at the provincial level, numbers for acreage per province are incomplete at time of writing. Total hectare (ha) totals for China reached 3.5 million ha, up 1.8 percent over 2023,and continuing a steady upward trend over the past five years and beyond. Over the past few years, the Western Belt (Yunnan, Guizhou, and Sichuan provinces) has held about 40 percent of China’s tea fields, and the Eastern (Zhejiang, Fujian, and Anhui provinces) and Central (Hubei, Hunan, Shaanxi provinces) Belts containing 20 percent each. Five-year growth trends (2019-2023 )also show the Western Belt increasing its yield per hectare by double-digit percentages, compared to smaller gains of 6-10 percent in yield per hectare for the other belts.

The Chinese government has encouraged the establishment of tea fields in the more poverty impacted counties of the Central and Western Belts as a means of promoting rural development and strengthening local incomes. Efforts appear to have made progress, as the central government declared victory in
eradicating poverty and now aims to secure more infrastructure development and economic stability in those areas. So, not only are the Western Belt provinces literally gaining more tea ground, but they are also coaxing more leaves out of their tea fields.

China’s Exports Inch Up

Global tea exports from producing countries rose by about 11.9 percent over the previous year to reach 1.9 mmt, with China exports increasing by 1.8 percent. China also maintained its place as the producing country with the second highest volume of exports. Kenya took the top position, having increased its exports by 13.7 percent over 2023 levels for a total of 595,000 mt. Kenya accounted for 30,6 percent of global exports from producing countries. China’s 0,37 mmt of exports accounted for 19.2 percent of global exports from producing countries and represented a 10 percent share of China’s total annual production.

Notably, 86.6 percent of China’s tea export volume was green tea and the next highest volume was black tea with 6.6 percent. Green tea exports rose by 4.7 percent over the previous year, but black tea continued a two-year decline. Black tea exports were 14.8 percent lower than the previous year. This rise and fall in black export volumes coincided with a few factors, but China’s black tea exports have generally followed an inverse trend in relation to the overall rise in export volumes out of India and Sri Lanka.

Exports to Morocco, China’s largest tea export partner, showed signs of recovery.

Most years, Morocco alone takes in about 20 percent of China’s exports, usually around 75,000 mt. 2023 saw levels decline by about 16 percent from 75,400 mt to 59,800 mt, but 2024 saw exports rebound to 80,584 mt. Ghana and Uzbekistan took the second and third positions, taking in 10.3 and 6.7 percent of imports, respectively.

Taken together, these three countries imported 38.5 percent of China’s tea exports. Russia, usually ranked as the seventh largest importer of Chinese teas, narrowed out Algeria, Senegal, and Mauritania to take fourth place — a gain of 13.7 percent in export volume. 2023 saw exports to the US at a five-year low, but the predicted re-balance of inventories resulted in a 37.5 percent increase in exports from China, and making the US the eighth largest export destination.

Looking forward, the 2024 data points toward a positive trajectory for China tea in 2025. China’s overall production capacity is set to expand. Domestic consumption will continue to be shaped by the rise of innovative and improving tea beverage offerings — including higher quality bubble tea drinks, and bottled teas incorporating a wider range and quality of base teas.

Export markets, while shifting slightly in their total volumes, appear stable overall. Tariffs will loom heavily for the US market.

From China’s perspective, 0,3 percent of its annual tea production volume is exported to the US. Seen from the American side though, China tea imports account for about 10 percent of both volume and value. The US consumer stands to lose more than the Chinese seller if tariffs on tea are not stabilised at a sustainable level.