Price rises stirring in tea and coffee world



Your cup of tea or coffee may be about to get more expensive.

The UN's Food and Agriculture Organisation (FAO) said black tea demand had exceeded supply since 2009, driving up the price.

Droughts in the world's main tea-exporting countries of India, Kenya and Sri Lanka have triggered a continuous shortfall in the market.

Demand has been bolstered by rapid economic "growth in per capita income levels, particularly in China and other economies", the UN agency said.

The average price of tea last year was US$2.85 per kilogram, compared with $2.33 in 2009. Total tea consumption increased 5.6 per cent to 4 million tonnes in 2010, the latest data shows.

In China, total consumption rose 8.2 per cent in 2009 from a year earlier and 1.4 per cent in 2010 to reach 1.06 million tonnes, the most in the world.

But production rose at a slower pace, at 4.2 per cent to 4.1 million tonnes for the same period. Black tea output increased by 5.5 per cent "in response to record prices" while green tea output was up 1.9 per cent.

World black tea is expected to come into equilibrium with regard to supply and demand by 2021 with a price of $2.75 per kilogram. Coffee-bean prices have also rallied. Robusta, used for making instant drinks and espresso, has gained almost 9 per cent since the start of the year amid lower crop yields and higher demand, to trade at $2,009 a tonne.

"The Robusta bean used to be very cheap because the plant didn't require much maintenance," said Hussein Awada, the owner at Lebanese Roastery in Abu Dhabi. But bad weather in Indonesia had reduced stocks for the 2012-2013 harvest, he said.

Mr Awada is hoping next year's crop will be large enough to prevent further price rises.

"Coffee is the backbone of my business. In 35 years, we have hiked our prices twice only."

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Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

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