Solidaridad led the Argentinian trade mission that attended the 3rd annual North American Tea conference held by the Tea Association of Canada and America in September in Niagara Falls, Canada. It is expected that by 2013 almost a quarter of tea exports will be certified by sustainable standards globally.
The conference delegation included members of cooperative Ruiz de Montoya, which brings together 517 associates (57 of which are women); and Valmitrán company, that represents all producers and companies that work with Solidaridad in Argentina.The three-day convention gathered of more than 150 participants, which are key stakeholders from the world tea markets like the USA, Canada, England, Japan, China, India, Sri Lanka, Kenya and Germany. On a global scale, Argentina is ranked 9th in the world production of tea; reaching 67,000 tons of dry tea in 2005 that went by almost 90% to foreign markets, mainly to the United States (55.30%, INDEC).
Building sustainable supply chains
The trip was organized by Solidaridad within its Tea Improvement Programme, conducted with partner University Gaston Dachary, to build a sustainable tea supply chain in Argentina between companies, local government, and small and medium producers of Oberá. The town in the province of Misiones, is 273km away from Iguazú Falls, and concentrates 95% of the national tea production on about 40,000 hectares surrounded by subtropical forests. With one of the highest concentrations of bio-diversity in the country, the area is threated by the expansion of the agricultural frontier.
Argentina sells medium or low quality tea of two types: "off grade", low priced tea used in the manufacture of instant and cold tea and "main grade", typified tea that goes to mixtures. Its almost 8,000 producers, mostly settlers, experiences low technological development and lack of good agricultural practices. Given the growing international demand, the industry now has the opportunity to improve their market share and achieve better prices and increase the productivity and quality of its raw material to access the more demanding European market.
Market developments in tea
Solidaridad assumes the dual challenge of supporting producers to improve their competitiveness within a necessary sustainable framework. This is achieved through training and certification on a large scale, strengthening the technical capacities of the producers from the perspective of intelligent and sustainable use of land and water. It also includes improving the organizational level sector through quality management processes, and facilitating collaboration and trust among chain actors. By 2013, it is expected that almost a quarter of the tea exports will be certified by sustainability standards, increasing the revenues of hundreds of producers as a result of the price differential obtained by better quality tea.
Following the comprehensive value chain intervention model that is a Solidaridad trademark, the mission to Canada was a key complement to the tea programme objectives. It proved to be a great opportunity for Argentina to increase representation at the industry events, which usually involve only large international conglomerates. Access to updated and detailed information on the industry state of affairs and trends, and exchange of experiences with peers from other countries allowed attendees to better analyze their own position in the market and thus redirect their efforts more effectively.
According to a representative from Agro and Production Ministry of Misiones, Helmuth Kummritz, it was a very valuable experience considering the reports submitted by each of the producing countries. “This showed that most are betting on quality and certification, and that mechanical harvesting, in which Argentina is a world leader, is becoming a global trend. As for the market in Canada and the United States, it was helpful to see the increasing figures on green tea consumption, especially among women and youth. This includes loose tea and special tea market growth through tea houses, and high consumption of iced tea in the foodservice U.S. (88% above the hot tea), bearing in mind that Argentina is the world's largest producer of tea for iced tea, “ he says.
The greatest success of the mission was among others providing cooperatives and SMEs access to face-to-face contact with traders, importers, distributors, suppliers and packers worldwide to identify business opportunities and close sales without intermediaries.