Ethically Traded Tea
Unlike coffee, tea is not quoted on the commodities futures market. The main reason being that tea can only be stocked for a limited period before it starts to deteriorate. So therefore with nobody hoarding stocks of tea in the hope that the price will rise, the market is free from speculation. Essentially it is what is known as an OTC (over the counter) market, operated in two main ways depending on whether high quality (grand crus) or inferior quality teas are involved.
1. Direct OTC transactions between producer and buyer
Based on human relationships and trust. The producer for his part is encouraged to grow teas of the highest quality as the price offered by the buyer is considerably better than would be offered by an exporter, wholesaler or even at auction. The process then normally involves sending samples of the crop to different potential buyers, no price is referenced and the buyer based on the sample comes up with what they believe is a fair price. The batch goes to the highest bidder.
OTC transaction between a broker and a buyer
The broker keeps the buyer informed of the teas available in his warehouse and sends on samples of the lots with an estimated price . The buyer indicates his maximum price and the broker will revert if happy with the price. Most of the time these brokers also double as blenders and they buy up lots that have failed to find buyers at auctions, and form them into blends . These blends in question are usually the cheaper ones. Limited understanding of these procedures in the West means that many distributors who claim to be importers are actually purchasing from a wholesaler on their own continent. In Europe for example the commercial tea hub is Hamburg in Germany, home to large scale tea brokers who supply the majority of European based tea companies.
Economic and social aspects of the Tea Industry
The size of tea plantations around the world varies greatly. From the few hundred square yards cultivated by a farmer and his family to the immense gardens which can cover thousands of acres and employ close to ten thousand workers.
Farmers: Small farm cultivated by the family or seasonal workers play a huge role in the tea economy. The farmer cultivates his land and harvests the crops. He then sells his tea on the local market.
Farmers organised into a cooperative: This system means that the farmer belongs to a cooperative and has joined together with neighbouring farmers to invest in the necessary equipment. He can still process his own harvest and then sell it as he wishes on the local market.
Farmers harvesting and manufacturing his own tea: In this case the farmer has personally invested in the necessary equipment and he is selling manufactured tea to a wholesaler / an exporter or sometimes directly to shops
Companies that cultivate and manufacture tea: In many countries small family concerns co exist with the big organisations. On the Indian sub continent more often than not these very large plantations belong to family groups or to multinational corporations which have several plantations and may have business interests in markets other than tea. In India these businesses never own the land but instead rent it long term.
At Hancock & Abberton our tea partners provide us with the highest quality tea, organically grown and harvested in a sustainable environment with social responsibility to ensure the goodness of tea is not compromised.
We choose our tea growers very carefully. the Chamraj Estate in India, for example, has been selected not just for the standards of its tea but also for the it's ethical philosophy and the emphasis placed on reinvesting and supporting its own people.
The estate contributes 9% of its revenue to the community to fund its own school, hospital and childcare.
By sourcing sustainable Rainforest Alliance Certified™ products, we are dedicated to purchasing agricultural products that have been grown according to internationally recognized environmental and social standards. Rainforest Alliance Certified™ farms protect forests, soils, waterways and wildlife habitat, and they ensure that farm workers benefit from decent wages, safe working conditions, dignified housing, medical care and schools for their children.