Trend in Tea Trade and the Role of Supply Chain

Discussion Papers

No.644

by Kaoru Nabeshima and Etsuyo Michida

March 2017

ABSTRACT

This paper first shows the trend of tea trade in major exporting countries. Although tea trade has been expanding, stricter regulation and tighter food safety requirements lead to a decline of trade and a consolidation of tea supply chains into a handful of multinationals is observed. Challenges that exporters face stemming from supply chain management as well as regulatory compliances are reviewed from the literature. Commoditization has been progressed with consumers’ willingness to pay for organic or other special characteristics and it leads to consolidation of supply chains. Tea industry is shown as a good example for this global trend. Consolidation of supply chains has an important implication for economic development in developing countries that depend on agricultural export.

Keywords: Food Standards Compliance, Importer, Supply Chain
JEL classification: D22, O12

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