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Davids-Tea1
Nipun Wisnagalage
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DAVIDsTEA Inc. Releases Second Quarter Fiscal 2018 Financial Results

In an era when specialty tea is emerging in North America, DAVIDsTEA Inc(https://www.davidstea.com/ca_en/home/) has announced financial results for the three and six months ended August 4, 2018. This leading Canadian tea retailer’s financial status doesn’t seem so good compared to same periods in 2017.

For the three months ended August 4, 2018:

  • Tea sales decreased by 12.0% to C$40.2 million from C$45.7 million in the second quarter of fiscal 2017. Comparable sales decreased by 14.8%. Comparable sales decreased as tea product offering did not resonate with customers, company was less promotional as it moved to reduce our dependency on discounting, and it had less product available for our semi-annual tea sale, as the company was in a better seasonal inventory position compared to the prior year quarter. They recently revised their merchandising strategy, which was not reflected in our second quarter assortment.
  • Gross profit decreased by 14.4% to C$17.3 million from C$20.2 million in the second quarter of fiscal 2017, while gross profit as a percent of sales decreased slightly to 43.2% from 44.2% in the second quarter of fiscal 2017. Gross profit as a percent of sales was down from the prior year quarter as product margin increases, driven by less promotional activity and a shift in product sales mix, were offset by a deleveraging of fixed costs due to the negative comparable sales.
  • Selling, general and administration expenses (“SG&A”) increased to C$31.4 million from C$27.8 million in the second quarter of fiscal 2017. As a percent of sales, SG&A increased to 78.0% from 60.9%. Adjusted SG&A, a non-IFRS measure, which excludes any impact from executive separation costs, impairment of property and equipment, onerous contracts and costs related to strategic review and proxy contest (see Reconciliation of IFRS basis to Adjusted selling, general and administration expenses), decreased to C$24.6 million from C$25.9 million, due to lower stock-based compensation and depreciation and amortization expenses. As a percent of sales, Adjusted SG&A increased to 61.2% from 56.7%, due to the deleveraging of fixed costs as a result of the negative comparable sales this quarter.
  • Results from operating activities were C$(14.0) million as compared to C$(7.6) million in the second quarter of fiscal 2017. Adjusted results from operating activities, a non-IFRS measure, which excludes any impact from executive separation costs, impairment of property and equipment, onerous contracts and costs related to strategic review and proxy contest (see Reconciliation of IFRS basis to Adjusted results from operating activities), decreased to C$(7.3) million from C$(5.7) million.
  • Adjusted EBITDA was C$(5.6) million compared to C$(2.2) million in the second quarter of fiscal 2017. Adjusted EBITDA, a non-IFRS measure, excludes non-cash or other items in the current and prior year periods (see Reconciliation of Adjusted EBITDA table).
  • Cash of C$39.6 million.
  • Net loss was C$(10.0) million compared to net loss of C$(5.6) million in the second quarter of fiscal 2017. Adjusted net income (loss), a non-IFRS measure, which excludes any impact from executive separation costs, impairment of property and equipment, onerous contracts and costs related to strategic review and proxy contest (see Reconciliation of IFRS basis to Adjusted net income (loss) table), was C$(5.0) million compared to C$(4.2) million.
  • Fully diluted income (loss) per common share was C$(0.39) compared to C$(0.22) in the second quarter of fiscal 2017. Adjusted fully diluted income (loss) per common share, a non-IFRS measure, which is adjusted net income (loss) on an adjusted fully diluted weighted average shares outstanding basis (see Reconciliation of fully diluted weighted average common shares outstanding table), was C$(0.19) per share compared to C$(0.16) per share.

For the six months ended August 4, 2018:

  • Tea sales decreased by 8.9% to C$86.0 million from C$94.4 million in the comparable period in fiscal 2017. Comparable sales decreased by 10.8%.
  • Gross profit decreased by 9.9% to C$40.0 million from C$44.4 million in the comparable period in fiscal 2017, while gross profit as a percent of sales decreased slightly to 46.6% from 47.0% in the comparable period in fiscal 2017. Gross profit as a percent of tea sales was in line with the prior year period as product margin increased, driven by less promotional activity and a shift in product sales mix, which was offset by a deleveraging of fixed costs due to the negative comparable sales.
  • Selling, general and administration expenses (“SG&A”) increased to C$55.7 million from C$52.0 million in the comparable period in fiscal 2017. As a percent of sales, SG&A increased to 64.9% from 55.1%. Adjusted SG&A, a non-IFRS measure, which excludes any impact from executive separation costs, impairment of property and equipment, onerous contracts and costs related to strategic review and proxy contest (see Reconciliation of IFRS basis to Adjusted selling, general and administration expenses), decreased to C$49.8 million from C$51.5 million, due to lower stock-based compensation and depreciation and amortization expenses. As a percent of sales, Adjusted SG&A increased to 57.9% from 54.6%, due to the deleveraging of fixed costs as a result of the negative comparable sales this quarter.
  • Results from operating activities were C$(15.7) million as compared to C$(7.6) million in the comparable period in fiscal 2017. Adjusted results from operating activities, a non-IFRS measure, which excludes any impact from executive separation costs, impairment of property and equipment, onerous contracts and costs related to strategic review and proxy contest (see Reconciliation of IFRS basis to Adjusted results from operating activities), decreased to C$(9.7) million from C$(7.1) million.
  • Adjusted EBITDA was C$(6.0) million compared to C$(0.7) million in the comparable period in fiscal 2017. Adjusted EBITDA, a non-IFRS measure, excludes non-cash or other items in the current and prior year periods (see Reconciliation of Adjusted EBITDA table).
  • Net loss was C$(11.2) million compared to net loss of C$(5.9) million in the comparable period in fiscal 2017. Adjusted net income (loss), a non-IFRS measure, which excludes any impact from executive separation costs, impairment of property and equipment, onerous contracts and costs related to strategic review and proxy contest (see Reconciliation of IFRS basis to Adjusted net income (loss) table), was C$(6.7) million compared to C$(5.3) million.
  • Fully diluted income (loss) per common share was C$(0.43) compared to C$(0.23) in the comparable period in fiscal 2017. Adjusted fully diluted income (loss) per common share, a non-IFRS measure, which is adjusted net income (loss) on an adjusted fully diluted weighted average shares outstanding basis (see Reconciliation of fully diluted weighted average common shares outstanding table), was C$(0.26) per share compared to C$(0.21) per share.

These results might be an evidence for the declining trend for Offline loose tea sales. By the mean time, the service sector is showing a positive trend which provides customers an opportunity to enjoy brewed tea.

References

1. Original Article + More Info: https://globenewswire.com/news-release/2018/09/13/1570847/0/en/DAVIDsTEA-Inc-Announces-Second-Quarter-Fiscal-2018-Financial-Results.html

2. https://porchlightequity.com/brand/davidstea/

3. https://www.davidstea.com/ca_en/home/

Redroselogo
Nipun Wisnagalage
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Harris Tea Company Announces Agreement with Redco Foods for Red Rose and Salada Tea Brands

Harris Tea Company (http://harristeabrand.com/) , the leader in private label tea manufacturing announced that it has purchased the tea manufacturing assets of Redco Foods (http://www.redcofoods.com/) and completed a license agreement for the Red Rose® and Salada® tea brands for the US market. The agreement allows Harris Tea Company and Redco Foods to better serve their customers nationwide. The two companies are combining over 100 years of expertise in tea sourcing, buying, manufacturing, selling & marketing.

 

“We’re excited about the opportunity to build and grow two long standing, iconic brands to meet the needs of today’s tea consumer” said Ray Borooah, CEO of Harris Tea Company.

The Harris Tea Company portfolio of tea brands now include Red Rose®, Salada®, Newman’s Own® Organic Tea, Southern Breeze Sweet Tea®, Big Tea®, Tea India®, Chai Moments®; and Wonder Drink® Kombucha and Secret Squirrel Cold Brew Coffee® through its affiliate company, Pure Steeps.

A division of Harris Freeman & Co, Harris Tea is a leading producer of private label black, green, herbal, and specialty teas and iced tea mix. We have four production facilities located in California, Georgia, New Jersey, and the United Kingdom. Our commitment to the highest quality products and customer service are the major reasons we have become the largest private label tea packer in the United States and beyond. Harris Tea provides a comprehensive private label tea solution for the vast majority of retailers and wholesalers in the US and beyond.

About Companies 

Redco Foods

Redco Foods, Inc. is subsidiary of Teekanne GmbH, the largest herbal and flavored tea company in Europe. Formed in 1985, Redco manufactures and distributes Salada tea, Red Rose tea, and Junket brand dessert mixes from the operations facility in Little Falls N.Y. All manufacturing occurs in Little Falls, NY with Marketing and Sales offices based in Bethlehem, PA.

Harris Tea 

Harris Tea Company is the leading producer in the US of private label black, green, herbal, and specialty teas and iced tea mix. We have an expansive reach with four production facilities located in California, Georgia, New Jersey, and the United Kingdom

Original Article: https://www.openpr.com/news/1244014/Harris-Tea-Company-Announces-Agreement-with-Redco-Foods-for-the-Red-Rose-and-Salada-Tea-Brands.html

tregothnan-tea-growingPNG
Nipun Wisnagalage
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Tregothnan in England Sees Biggest Ever English Tea Harvest

Tea is a way of life in England. English tea tradition has been deep rooted in to English souls. But no one would imagine that the tea is grown in this resplendent island. Tregothnan English tea land is one of them (Web:https://tregothnan.co.uk/). Plymouth Tea (Web:https://www.plymouthtea.co.uk/) is another based in Devon.Britain’s heatwave has seen the biggest ever harvest at Tregothnan tea farm – enough to make one huge number of English tea cuppas.

The soaring temperatures have resulted in the biggest crop of chamomile the country has ever seen.

As the mercury soared around the UK the herb used to make the popular tea flowered in abundance at Tregothnan estate, near Tresillian.

It has now begun harvesting the crop – the largest ever seen in the estate’s 700-year-old gardens.

Tregothnan tea farm’s Bella Percy-Hughes, 36, said the crop, enough for about a million cups of tea, will all thanks to the UK’s ‘mini Mediterranean’ summer.

She said: “Normally it’s grown in the Mediterranean but because we’ve had such a hot climate chamomile production has increased significantly.

“It’s the largest amount of chamomile every harvested in the UK for tea production.

“The crop is being harvested now and then it will be dried in big hot boxes before it is made into tea – when we’re finished we’ll have enough for about a million cups.

“It’s really exciting for us, it’s a great product and we’re really quite proud of it.

“As soon as we had the hot weather with out sign of stopping we knew it would be a good year.

“We can’t tell about next year but we’re increasing the area we are planting chamomile so that will help increase production.”

Tea has been grown at the historic Cornish estate since 1999 and was first harvested in 2005. It began harvesting chamomile in 2006.

Original Article: https://www.cornwalllive.com/news/cornwall-news/tregothnan-cornwall-sees-biggest-ever-1878557#

 

Ceylon Tea 2
Nipun Wisnagalage
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Should Sri Lanka Go for An Outside Tea Hub ?

The topic of setting up a tea hub in Sri Lanka led to many arguments during last few years. Mr. Nathan Sivagananathan who drives strategy, growth and innovation at local apparel major MAS Holdings (http://www.masholdings.com/), proposes Sri Lankan tea industry to set up a tea trade zone or a bonded hub based within a free trade zone outside Sri Lanka to blend Ceylon Tea with teas of other origins to compete with global pricing and high value additions.


“Trade zones outside Sri Lanka are helping the apparel industry to be more global. The Sri Lankan tea industry can benefit from having a tea trade zone or a bonded hub based within a free trade zone in the Middle East or Africa, where global tea can be mixed and exported to compete with global pricing,” Sivagananathan said delivering the keynote speech at the 19th Annual General Meeting (AGM) of Tea Exporters Association (TEA) last Friday.

MAS Holdings Chief Growth Officer and Director pointed out that having trade zones outside Sri Lanka is helping the apparel industry to be more global.

As the main stakeholders of Ceylon tea industry remain divided over blending of tea for re-export from Sri Lanka, Sivagananathan suggested that setting up of tea trade zones outside the country could be a good alternative to reach a consensus.

The Regional Plantation Companies (RPCs) and smallholders oppose liberalisation of tea imports for blending, fearing it would adversely impact local tea prices at auctions.

However, Sivagananathan pointed out that 80 percent of Sri Lanka’s tea exports are in bulk format, with almost 40 percent getting value added at import destinations and tea hubs in the Middle East.

“Eighty percent of our tea is exported in bulk and probably blended elsewhere, so why not start doing this ourselves?” he questioned.

Sivagananathan stressed that Sri Lanka should change the mindset that all investment should be within Sri Lanka to bring in revenue.

“Although based offshore, this still brings in revenue to Sri Lanka through a different supply chain. We need to move on from the belief that all investment should be within Sri Lanka to bring in revenue. We must shift to a mindset that we can invest in other countries if this will have a more favourable impact on the industry as a whole.”

He noted that Ceylon Tea faces the challenge of maintaining the reputation as one of the world’s premier tea producers.

“World tea consumption has grown at an average of 4.5 percent every year in the last decade, driven by rapidly increasing demand from China, India, and other emerging economies. However, tea production in Sri Lanka is stagnant. Production in 2017 was at the same level it was 15 years ago, which was around 310
million kgs.”

He emphasized that Sri Lanka has failed to capitalise on the rising global demand for tea, a US $70 billion industry being driven by growth in the value-added segment while noting that Sri Lanka’s share in the global tea supply had dropped from 20 percent to 6 percent over the past 50 years.

He also urged the tea industry to research on consumers in their main markets, tracking their likes and dislikes, income levels, and lifestyle changes, to adapt tea to suit customer needs as MAS has been doing in the apparel industry.

Speaking on the lack of R&D activities, Sivagananathan pointed out that the Sri Lanka Institute of Nanotechnology (SLINTEC) is a great example for a public-private institution doing excellent research and churning out patents, which can be a good model for more efficient, viable, commercialised research in the tea industry.

“The tea industry needs to invest in digitising payment and collection methods, soil testing, geo mapping, and automated book keeping.

Even a drastic agricultural revolution like aquaponics could be considered an opportunity, not as something to fear. Have we thought about whether tea could be grown in a different way? It is essential to develop unique systems of tea planting, and not rely on tea planting systems set in place during the British rule.”

Sivagananathan as the Chief Growth Officer of MAS is charged with generating new businesses and to drive MAS to achive the US$ 2 billion goal by 2020.

References

Original Article: http://www.dailymirror.lk/article/Tea-industry-told-to-look-outside-in-setting-up-hub-155025.html

Picture Soure: https://www.news.lk/news/sri-lanka/item/7754-ceylon-tea-the-world-finest-ethically-produced-tea

42149150-pitcher-y-tarro-de-albañil-tazas-llenas-de-té-y-limones-helado-sentado-en-la-mesa-de-picnic-con-mantel-co
Nipun Wisnagalage
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North American Tea Conference is Around the Corner

Tea is emerging as one of the most favorite beverages in both USA and Canada. The specialty tea trend created by gentlemen like Mr. David Walker, founder of Walker Tea LLC and Mr. Steven Smith, founder of Steven Smith Teamaker seems spreading all over North America. Now there is a great opportunity for you all to join industry leaders at the annual tea conference hosted by the Tea and Herbal Association of Canada and the Tea Association of the USA. This three-day conference gives attendees latest industry news and statistics, networking opportunities and sessions for professional development.

Dates: September 25-27, 2018
Location: Hilton Niagara Falls/Fallsview Hotel & Suites

For registration, agenda and more details browse in to the official website of Tea and Herbal Association of Canada via URL:

Turning a New Leaf

Picture Source:

https://es.123rf.com/photo_42149110_pitcher-y-tarro-de-alba%C3%B1il-tazas-llenas-de-t%C3%A9-y-limones-helado-sentado-en-la-mesa-de-picnic-con-monte-gar.html?fromid=a2k0N21ZUGxNKzEveEdCNFVKYVZwZz09

5b800f701e409.image
Nipun Wisnagalage
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0

DavidsTea, Canada names two new independent directors, chief financial officer resigns

Leading Canadian Specialty tea retailer, DAVIDsTEA Inc (https://www.davidstea.com/ca_en/home/). (Nasdaq: DTEA) is pleased to announce the appointment of Anne Darche and Susan L. Burkman to its Board of Directors, upon the recommendation of the Corporate Governance and Nominating Committee of the Board. The founder of DavidsTea Inc. is was sued by company shareholders seeking to have Herschel Segal removed as executive chairman and the election of a new board of directors.

DavidsTea names two new independent directors, chief financial officer resigns

Anne Darche is a marketing and consumer-trends specialist with a 20-year career in Montreal advertising agencies, primarily as a co-owner, VP for strategic planning and president.  The agency she helped build and administer, Allard Johnson (now KBS), has become one of Canada’s leading advertising firms.  A respected speaker, she has been heard regularly on Radio-Canada sharing her views on trends, breakthroughs and market disruptions.  Ms. Darche serves as a director of Groupe Germain Hôtels, a company based in Quebec City that owns and operates hotels across Canada, Knowlton Development Corporation (KDC), a leading North American contract manufacturer of health and beauty-care products, and 48North Cannabis Corp., a company listed on the TSX Venture Exchange whose wholly-owned subsidiary is a licensed producer of medical cannabis in Canada.

She is also chair of MU, a not-for-profit organization devoted to beautifying the city of Montreal by creating murals that are anchored in local communities.  Ms. Darche holds a Bachelor of Arts degree in graphic design from Université Laval and a Masters of Business Administration degree from Université de Sherbrooke and is a Chartered Director.

Susan L. Burkman is an experienced financial consulting executive.  Throughout her 35 years in the investment banking industry, she has successfully led equity, M&A, and valuation and fairness opinion transactions in excess of $6 billion for Canadian companies across numerous industries.  Since 2007, she has been majority shareholder and President of Burkman Capital Corporation, an investment banking boutique located in Bromont, Québec.  From 1997 to 2007, Ms. Burkman was a partner at Griffiths McBurney and Partners and a Director at GMP Securities where she led the Investment Banking Group in Montreal.  Prior thereto, Ms. Burkman was President of Mathurin-Burkman Inc., an investment banking boutique, a Vice-President and member of the Board of Directors of McNeil Mantha Inc., then a publicly-traded Canadian securities brokerage firm, and held positions with Wood Gundy Securities in Toronto and with the Corporate Banking division of Bank of Montreal.

Ms. Burkman started her professional career as an auditor with KPMG at its Pittsburgh, Pennsylvania and Toronto, Ontario offices.  Since 2012, Ms. Burkman has been a member of the Board of Directors of Olameter Inc., a provider of outsourced utility solutions in North America based in Montreal.  Ms. Burkman holds both a Bachelor of Arts degree and Masters of Business Administration degree from the University of Pittsburgh and became a Certified Public Accountant in Pennsylvania.

The Board considers that both Anne Darche and Susan L. Burkman are “independent directors” within the meaning of applicable securities regulations.  The Board of Directors of DAVIDsTEA is now comprised of Herschel Segal, Susan L. Burkman, Anne Darche, Pat De Marco, Emilia Di Raddo, Max Ludwig Fischer and Peter Robinson.

DAVIDsTEA also announces that the Board of Directors has appointed Peter Robinson and Susan L. Burkman as members of the Audit Committee of the Board of Directors, chaired by Pat De Marco.  Mr. Robinson was until recently CEO of the David Suzuki Foundation and prior thereto CEO of Mountain Equipment Co-op, a Canadian consumers’ cooperative.  The Board of Directors also appointed Anne Darche and Emilia Di Raddo as members of the Human Resources and Compensation Committee of the Board of Directors, chaired by Max Ludwig Fischer.  The Board expects to appoint a “lead director” at its next meeting, scheduled to be held in September.

DAVIDsTEA is also pleased to announce the appointment of three new Vice-Presidents, namely, Nathalie Binda, Vice-President, Marketing & E-Commerce, Martin Hillcoat, Vice-President, Supply Chain, and Alana Lapierre, Vice-President, Human Resources, and the return of Sarah Segal as Vice-President, Product Development & Innovation, a position Ms. Segal held prior to the recent annual meeting of shareholders.

They join April Sabral, Vice-President, Retail Sales & Operations, Nathalie Pelchat, Vice-President, Merchandising, and Dominique Choquette, Vice-President, IT, on DAVIDsTEA’s management team, reporting to Herschel Segal, Executive Chairman and Interim Chief Executive Officer.

DAVIDsTEA also announces that Howard Tafler, Chief Financial Officer, has tendered his resignation in order to accept a position in another industry.  Herschel Segal and the Board of Directors sincerely thank Howard Tafler for his valued contribution and loyalty to DAVIDsTEA over the last eight years and wish him the very best in his new position.  The resignation takes effect in 30 days.

The Board of Directors has appointed Joe Bongiorno, Director of Finance of DAVIDsTEA, as Interim Chief Financial Officer and has commissioned the Human Resources and Compensation Committee to initiate the process of finding a new Chief Financial Officer.

About DAVIDsTEA

DAVIDsTEA is a retailer of specialty tea, offering a differentiated selection of proprietary loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories and food and beverages, primarily through 240 company operated DAVIDsTEA stores throughout Canada and the United States as of May 5, 2018, and its website, davidstea.com. The Company is headquartered in Montréal, Canada.

References

1. Original Article: https://globenewswire.com/news-release/2018/08/24/1556428/0/en/DAVIDsTEA-Appoints-two-new-Independent-Directors.html

2. Picture Source: http://www.kelownadailycourier.ca/business_news/national_business/article_86b5419c-4005-5307-92e4-2b85e6f62cd0.html

ceylon-tea-Sri-Lanka
Nipun Wisnagalage
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0

Ceylon Tea industry performance in first half of 2018

Ceylon Tea Exporters Sri Lanka Banned by Russia, Ceylon Black Tea Sri Lanka, Ceylon Tea Manufacturers Sri Lanka, Sri Lanka News Latest

The second quarter of the Sri Lankan tea industry in 2018 saw a sharp decline in elevation averages in comparison to the first quarter.

Increased crop figures and decline in quality, political tension in the Middle East, contributed towards the downward spiral of prices in quarter two. Whilst the global tea supply increased in the first half of 2018, Sri Lankan tea exports remained static in comparison to the same period last year.

Iraq, Turkey and Russia continued with strong demand for Sri Lankan tea and were the top three importers in the first six months concluded.

The total Sri Lanka tea production for January-June 2018 recorded 158.21 M Kgs in comparison to 156.78 M Kgs (+1.43 M Kgs) for the same period last year. Production has increased by 1.43 M Kgs and exports have decreased by 1.1 M Kgs compared to the same period in 2017.

The total national average of the teas sold for January-June 2018 was Rs.603.52 in comparison to Rs 615.32 (- Rs 11.8) for the same period last year. Low Growns averaged Rs.628.17, Mid Growns recorded Rs.543.10 with High Growns at Rs.575.44.

The averages for High, Medium and Low Growns in rupee and dollar terms, shows a decrease for the period January-June 2018 when compared to the same period in 2017 but its higher compared to 2016, 2015 and 2014. Low Growns with the largest market share with 61.8% of the production recorded a decrease of (-Rs. 8.31) with the High Growns recording a decline of (-Rs. 12.85) whilst the Medium Growns decreased by (-Rs. 29.63) when compared to year 2017.

Sri Lanka tea exports for January-June 2018 amounted to 137.59 M Kgs vis-à-vis 138.69 M Kgs recorded for the same period last year (-1.1 M Kgs). The FOB average price per Kilo for this period stood at Rs. 828.13 as against Rs. 796.34 recorded for the same period last year. (+Rs. 31.79)

The total revenue realised for the period January-June 2018 from tea exports was Rs. 114.0 billion ($ 751.28m) compared with Rs. 110.4 billion ($ 728.23) (+Rs 3.6 billion) recorded last year. It’s an increase in rupee and dollar value compared to the year 2017.

Iraq has emerged as the largest buyer of Sri Lankan tea in the period of January-June 2018 outplacing Turkey. Russia and Iran records as the third and fourth largest importers of Sri Lankan tea for the mentioned period.

The global economic overview

The world’s economic growth remained robust in Q1. Meanwhile economic data for Q2 suggests that global growth will decelerate slightly in Q2 as the driving factors that have propelled worldwide economic growth since 2016 start to wane.

In the Euro area ongoing political unrest continues to weigh on growth, with political crisis in Italy and Spain. The UK economy is suffering from uncertainly related to Brexit. United States represents the Silver lining with the economy firing all cylinders. The global growth is expected to ease slightly to 3.4% in Q2.

Russian economy

On 22June Russia and OPEC members agreed to raise oil production a move that would bode well for Russia’s oil revenue going forward. Low employment rising real wages and firm commodity prices should fuel quicker growth this year.

Iran economy

The US continues to put pressure on Iran’s trading partners to cut their imports from the Persian country. The United States is urging countries to reduce oil imports from Iran to Zero by November 4th. Moreover, United States will not grant any waivers for countries or companies doing business with Iran. If the US succeeds in dramatically cutting much needed oil revenues, it will badly hit the Iranian economy. Iran economy is expected to grow 2.8% in SH 2018. The Iranian Rial has devalued 40% against the US Dollar since May and trades at around 90,000 to a dollar.

The Middle East and North Africa (MENA)

The regional economy gained steam at the outset of the year as a higher oil prices and steady production boosted economic growth.

Chinese economy

The brewing full blown trade war between China and United States is the main downside risk to China’s economic outlook. The economy is seen to grow 6.5% in 2018.

Crude oil

Brent crude oil recorded an average of $ 74.4 per barrel in June 2018 as against $46.37 per barrel in 2017. (Brent crude is the world’s leading crude bench mark for Atlantic basin. It is used to price two-thirds of the international traded crude oil supplies.)

US Dollar

The US Dollar has strengthened in Q2 against the basket of other currencies. The US Federal Reserve is likely to hike interest rates twice more this year. The US Dollar hit a 13-month high against a basket of currencies in the month of August.

Countries that imported the highest dollar value worth of tea during 2017

1. Pakistan $549.6 million (7.5% of globally imported tea)

2. Russia $ 525 million (7.2% of globally imported tea)

3. United States $ 486.8 million

4. United Kingdom $ 404 million

5. Iran $ 283.8 million

6. Egypt $273.8 million

7. Saudi Arabia $ 263.2 million

8. UAE $ 238.8 million

9. Germany $ 225.2 million

10. Morocco $ 219.8 ml

(Source: ITC)

Global purchases of imported tea totalled $ 7.3 billion in 2017. Overall, the value for imported tea for all buyer countries fell by an average 0.5% since 2013.

Asian countries accounted for the highest dollar worth of tea imported during 2017 with purchases valued at $ 3.1 billion or 42.3% of the global total. European countries were at 30.3% while 14.7 % of the worldwide tea imports were from Africa.

Major tea producing countries are currently witnessing healthy production levels. Whilst, seasonally prices are expected to move up on the short term in the next few months due anticipated demand from the European sector, US sanctions against Iran and impending sanctions against Turkey and Russia, political tension in the Middle East could have adverse effect on the price structure of the tea industry.

References

1. Original Article: http://www.ft.lk/agriculture/Tea-industry-performance-in-first-half-of-2018/31-661365

2. Picture Source: http://www.tradeflock.com/2017/12/20/ceylon-tea-exporters-sri-lanka/

Nipun Wisnagalage
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0

San Francisco Is Poised To Ban Plastic Straws. That’s Got Bubble Tea Shops Worried

San Francisco may become the next U.S. city to ban plastic straws. The city’s board of supervisors approved the ban on a preliminary basis last week and the final decision is on its agenda Tuesday. That has shops that sell boba, or bubble tea – a drink that has to be sucked through a straw – concerned.

For boba fans, the straw is an integral part of the experience. “Boba is just, in general, an expression, right? Says Alvin Yu, co-owner of the city’s Steep Creamery and Tea. “You have not just tapioca pearls, but you also have aloe jelly, you have these herbal jellies that we make ourselves. And it all requires a straw.”

According to Yelp, more than 200 shops sell bubble tea in San Francisco. All of them will have to change their business practices if the city bans plastic straws to help reduce litter and landfill and combat the amount of single-use plastics that end up polluting the ocean.

The size and shape of plastic straws makes them particularly problematic for the city’s composting and recycling centers, says San Francisco Supervisor Katy Tang, who spearheaded the bill. “When they’re being sorted in the sorting machines, [the straws] just fall through the cracks and so they don’t actually get composted — even if they are, supposedly, made of compostable material,” she says.

That’s why San Francisco’s plastic straw ban goes a step further than similar prohibitions passed by other U.S. cities: Not even plastic that’s compostable is allowed.

Yu says he was lucky. His shop was able to beat the rush and order paper straws in advance of the ban.

Only a few companies manufacture super-sized paper straws big enough for bubble tea. They’re all reporting huge orders and delays lasting up to four months.

But paper is not a perfect fix, says Yu. “Part of the experience of drinking boba is poking a sharp end of a straw through the plastic seal of a cup. And that’s something we wanted to emulate,” he says.

But the paper straws Yu ordered aren’t cut with a point on the end. So he and his staff have to cut them all by hand. The paper straws are also expensive — about 10 times more than plastic straws.

What about drinking bubble tea without a straw? “It’d be really hard,” says boba fan Julie Abad, a customer at Yu’s shop drinking a plain black tea with tapioca and lychee jelly at the bottom. “I think I’d have to pour it into a cup and use a spoon or something.”

Others, like customer Kehlani Penland, just dismissed the idea outright. “Nobody wants to do that when you’re walking and it’s cold outside. You know, you just want to sip it with a straw!”

Right now, Steep Creamery and Tea is offering the paper straws for free. But Yu says that over time, he will have to raise prices.

Still, some environmentally conscious boba consumers, like 10-year old Alice Asoyan, say all this effort is worth it. “Our world is in big danger right now because of plastic, so paper is probably better,” she says.

If the bill passes again on Tuesday, it goes to Mayor London Breed for her signature. She has previously come out in favor of the ban. Businesses will then have until July 2019 to trade in their plastic straws for paper.

Boba lovers can also choose to do what Supervisor Tang suggests: carry a metal straw just for bubble tea.

About Boba / Bubble Tea

Bubble Tea Originated In Taiwan In The Early 1980’S At A Small Tea Stand. In 1983 Liu Han-Chieh introduced Taiwan to tapioca pearls. The new fad was to add tapioca pearls into a favorite drink. Most of the time tapioca pearls were served in cold infused tea. After the tea and flavor were shaken well, it topped tapioca pearls that were sitting on the bottom of a clear cup. The tapioca pearls also looked like bubbles, thus also became to known as “Bubble Tea.”
The drink is made with fresh fruits, milk, and crushed ice to create a milk shake.

References

1. Original Article: https://www.npr.org/sections/thesalt/2018/07/30/634086689/bubble-tea-sellers-say-plastic-straw-ban-won-t-be-good-for-business

2. About Bubble Tea: https://www.bubbleteasupply.com/bubble-tea-history/

3. Picture Source: https://www.yelp.com/biz/qualitea-san-francisco-2

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Nipun Wisnagalage
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Rise in global tea consumption and production will improve food security in Sri Lanka – FAO report

Being the producer of world renowned generic tea brand “Ceylon Tea”, Sri Lanka is focusing heavily on Tea quality and sustainability.

According to a new report released Monday by the United Nations Food and Agriculture Organization (FAO) global tea consumption and production are projected to keep rising over the next decade.

The rise, driven by robust demand in developing and emerging countries will create new rural income opportunities and improve food security in tea-producing countries, including Sri Lanka, according to the FAO report, which was discussed by the FAO Intergovernmental Group (IGG) on Tea, at its biennial meeting in Hangzhou, China.

The report suggests that tea consumption has also benefited from increased awareness about the beverage’s anti-inflammatory, antioxidant and weight loss effects. Such health and wellbeing benefits are seen as the key drivers of future consumption growth.World production of black tea is projected to rise annually by 2.2 percent over the next decade to reach 4.4 million tonnes in 2027, reflecting major output increases in China, Kenya and Sri Lanka – with this China would reach the output levels of Kenya, the largest black tea exporter in the world.

The Ceylon tea industry showed its greatest year-on-year crop shortfall in recent times, as the subsector faces various challenges due to severe weather conditions, coupled with government restrictions on fertilizer subsidies, the report said. However, crop shortfalls in 2015 and 2016, recovered in 2017.

Black tea consumption is projected to grow at 2.5 percent annually to reach 4.17 million tonnes in 2027, reflecting the strong growth in consumption in producing countries. Moderate growth rate of 3.3 percent is expected in Sri Lanka.

Black tea exports are projected to reach 1.66 million tonnes in 2027. However, Asia’s exports growth rates are negative, except for Vietnam (2.6 percent), with an average decline of 0.7 percent. However, by 2027, export volumes for Asia are projected to reach 840,623 tonnes while major exporting countries are expected to remain the same, with Kenya being the largest exporter followed by India, Sri Lanka, Argentina, Vietnam, Uganda , Tanzania, Rwanda, Malawi, and China.

The review of the world tea market indicates a 2.2 percent increase in trade volumes in 2016, resulting in an estimated 2.8 percent decline in export earnings to USD 5.46 billion at the global level.

However, the export revenues contributed significantly to financing the food import bills of tea exporting countries. In Sri Lanka export earnings of USD 1.63 billion financed 63.8 percent of Sri Lanka’s food import bills in 2014.

The IGG report also warns that tea production is highly sensitive to changes in growing conditions. Tea can only be produced in narrowly defined agro-ecological conditions and, hence, in a very limited number of countries, many of which will be heavily impacted by climate change.

The report argues that the decline in tea consumption in the traditional European markets could be stalled or even reversed by diversifying into other segments, such as organic and specialty teas, and by promoting their health and well being benefits.

About Ceylon Tea

It was during the British era that tea first began to be cultivated and manufactured here. Tea from Ceylon soon gained the reputation of being the finest in the world, and tea exports became the mainstay of the colonial economy. Housewives and restaurateurs across the globe grew familiar with the name of the country, learning that its appearance on a tin or packet reliably guaranteed the quality of the tea inside. Independence brought new markets, and production continued to increase. In 1965 Ceylon became, for the first time, the world’s largest exporter of tea(http://www.pureceylontea.com/index.php/features/why-ceylon-tea)

Source: http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=185413

Davids Tea
Nipun Wisnagalage
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DavidsTea shareholders sue company founder seeking to have him removed

The founder of leading Canadian online specialty tea retailer DavidsTea Inc. is being sued by company shareholders seeking to have Herschel Segal removed as executive chairman and the election of a new board of directors.

Three Highland Limited partnerships which together own 12.8 per cent of the Montreal-based beverage retailer’s shares filed suit in Quebec Superior Court against Segal and his investment firm Rainy Day Investments.

Rainy Day Investments owns 46.4 per cent of Davids Tea shares.

It says the lawsuit is without merit and contains old, baseless allegations.

Segal says in a statement that DavidsTea won’t be distracted by efforts to turn around the struggling retailer.

DavidsTea, which is not named as a defendant, says it will defend against efforts that affect the election of directors or appointment of management.

Source: https://business.financialpost.com/pmn/business-pmn/davidstea-shareholders-sue-company-founder-seeking-to-have-him-removed

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