PICKING TEA: Tea farmers return home after a day's work at Nanhu Tea Production Cooperative in the city of Rizhao, east China's Shandong Province, on May 8. The city has become one of the largest green tea growing bases north of the Huaihe River in central China (WU ZENGXIANG)

The Espoo Museum of Modern Art (EMMA) in Finland held an exhibition on Chinese tea culture from last October to January this year, attracting some 700 visitors on the first day alone. But even as China introduces its tea culture to Finland and people from all over the world, its tea traders are struggling in an increasingly competitive market.

Trading pinch

China is one of the biggest tea producers in the world, with its tea output accounting for one fourth of the world total. Wild tea plants were first discovered in China over 4,000 years ago, and the Chinese people began to grow their own tea plants 2,000 years ago. Chinese tea, produced in 20 provinces and autonomous regions throughout the country, is mainly categorized into six varieties, including green tea, black tea and white tea.

Inheriting these ancient traditions, the tea industry has developed rapidly in recent years. China has been a big tea producer since 2006, and its tea output in 2007 and 2008 hit 1.14 million tons and 1.2 million tons, respectively, according to the China Tea Marketing Association (CTMA).

"China's tea exports rank third in the world, following Kenya and Sri Lanka," CTMA Vice President Wang Qing told Global magazine last month. "Nevertheless, China's influence in the tea industry is not equal to its export status—China has no say in terms of tea in the world market."

People all over the world annually consume over 1.5 million tons of black tea produced mainly in Sri Lanka, India and Kenya, who enjoy a much higher market share compared with China.

"China has a fairly weak competitiveness in terms of black tea, though it boasts well-known domestic black tea brands such as qimenhong, yingdehong and dianhong," said Wang.

The brisk sales of black tea around the world are partly because of Lipton, one of the world's best-selling brands of ready-to-drink tea, which established the red tea standard accepted by the world. Lipton helped Kenya become a big tea exporter by adopting a British management model.

According to Wang, China's tea exports in 2008 were nearly 290,000 tons, ranking third worldwide following Kenya (310,000 tons) and Sri Lanka (300,000 tons). More than 70 percent of green tea in the world market comes from China, accounting for 90 percent of China's total exports of tea.

But green tea only occupies around 10 percent of the total worldwide tea trade, and China faces competition from Viet Nam, Japan and Indonesia. India and Sri Lanka are preparing to produce green tea as well.

Chinese tea has long struggled to make a breakthrough in its export quantity, partly due to its lack of established global brands, according to Wang.

China now boasts more than 60,000 tea factories and has many well-known tea brands at home, such as West Lake Longjing, Anxi Tieguanyin and Dongting Biluochun. Nonetheless, few are known to the world.

World-known brands with standard regulations are crucial to occupy the world market. "China should establish its international brands in an active way," said Wang.

The fairly weak competitiveness also features low output value. The top 100 tea enterprises in the country have a combined annual output value of 16.3 billion yuan ($2.4 billion), accounting for 54 percent of the country's total of 30 billion yuan ($4.4 billion). Lipton has an annual sales volume of 1.5 billion British pounds ($2.8 billion). That one brand alone gives Britain powerful say over the world tea trade.

Reluctant to export?

China's tea businesses often do not export their products due to the low prices they fetch.

The Chinese people prefer to drink high quality tea represented by tender sprouts picked in the first round before Tomb-Sweeping Day (April 5 or 6) and Grain Rain (April 20 or 21), two solar terms on China's lunar calendar.

First-round tea, made from the tenderest sprouts, is usually very expensive. Take longjing tea, for example. First-round longjing tea costs 10,000 yuan ($1,470) per kg. The price falls with each round of harvest until it reaches 100 yuan ($14.7).

But export prices only average 14 yuan ($2.05) per kg (the price in 2007 was $1.95). It is difficult for tea exporters to earn any profit with the increasing costs of labor, planting and shipping. As a result, most businesses prefer to sell tea at home rather than abroad.