value chain/ market analysis of the orthodox tea sub ... - Nepal Trade

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establishment of the National Tea and Coffee Development Board (NTCDB) in 1993. Therole of NTCDB was to organize tea and coffee farming, produce high quality products, andfacilitate policy development towards market management and export and importsubstitution. The government leased its NTDC holdings to a private firm in 2000 for 50years. Many commodity specific organizations and cooperatives were formed to promote andsupport the tea sector such as the Nepal Tea Planters Association (NTPA), Nepal TeaAssociation (NTA), Himalayan Orthodox Tea Producers Association (HOTPA), HimalayanTea Producers Cooperative (HIMCOOP), and the Central Tea Cooperative Federation(CTCF). In due course, various donor agencies and local development organizationssupported the development of the tea sector. Furthermore, the GON introduced the NationalTea Policy in 2000 and NTCDB developed a Tea Sector Development Strategic Plan for2010-2014.1.2 ObjectiveThe overall objective of this study is to analyze the present value chain/market status oforthodox tea and identify strategies to enhance the competitiveness of the sector with aprominent role by the private sector.1.3 Scope of the StudyThe scope of this study is presented below:· Short description of the orthodox tea value chain based on existing reports (valuechain analyses with focus in competitiveness and impact) by the CommercialAgriculture Development Project (CADP), Netherlands Development Organizations(SNV), and the Agro-Enterprise Center (AEC) with a clear value chain map;· Identification of all actors along value chain; their numbers, roles and existingrelationship/trust;· List with contact details of lead firms/exporters/traders and to the extent possible anestimate of their size (i.e. tons purchased) and/or importance (i.e. percent of market,major commodity supply areas);· List with contact details of foreign importers/buyers;· In depth market study giving reliable monetary estimates of the full value chain;production, imports/exports, value addition, value chain governance etc.;· Interviews with major lead firms/exporters identifying key opportunities andconstraints;· Provide calculations on impact of organic transition within the NEAT project life,potential increase in export value;· Conduct private sector dialogue meetings, bringing together key actors along thevalue chain, to discuss key opportunities and constraints and possible win-winactivities for NEAT;· Assess willingness of actors (exporters, traders, firms) to work together to enhancetheir competitiveness; and· Based on NEAT annual work plan and subsector analysis report, interviews, dialoguemeetings and market information, identify main strategies and their implications fordown- and upstream actors, including their costs-benefits and timeframe.Value Chain/Market Analysis-Orthodox Tea 4
1.4 Study approach and MethodologyThis study is based on a value chain approach focusing on competitiveness and exportmarkets. The methodology for this study included market visits, interaction withstakeholders, traders, processors, and exporters. Three types of checklists were developed andused for discussions with traders/processors/exporters, focus groups, and other institutions.Another component of the study includes an analysis of the enabling environment, which isnecessary to foster business.The study was carried out in coordination with NEAT staff and in consultation with leadtraders, processors, small holder farmers, HOTPA, HIMCOOP, NTCDB, variousdepartments from the Ministry of Agriculture (MOA), Ministry of Commerce and Supplies(MOCS), Ministry of Industries (MOI), and other donor agencies. Both qualitative andquantitative data were used during this study. Qualitative data was collected from theinteraction with traders, processors, exporters, and related stakeholders whereas quantitativedata was collected from secondary sources. Assistance was also sought from our Indianprivate sector partner Medherb Consulting Company - to gather information from theIndian buyers. The information collected from different sources was triangulated andvalidated through a Private Sector Dialogue Meeting (PSDM) conducted in Kathmandu andincluded expert review before completion. Specifically, the study followed the followingactivities in sequence:· Development of methodology including checklists and travel plan;· Consultation with NEAT team and finalization of methodology including checklistsand travel plan;· Review of existing reports and publications AEC, ITC, FAO, SNV, CADP· Consultation with key informants;· Interview with lead firms/exporter/traders/processors;· Visit to production pockets and interaction with local actors;· Visit to major domestic market hubs and some Indian boarder cities; and interactionwith traders;· Compilation of findings and triangulation with secondary sources;· Organization and facilitation of a private sector dialogue meeting;· Meetings with other donor agencies/projects;· Preparation of first draft to be shared with NEAT team and experts; and finally· Review of report and final submission to NEAT.1.5 Limitations of the StudyThe following conditions define the limitations of the study:· There was little time to conduct a detailed value chain study of the orthodox tea sectorand the study was confined to Nepal;· It was difficult to acquire information from processors and exporters due to tradesecrets;· Segregated data on orthodox tea was not available;· There may be gaps in the trade data reported by the Food and AgricultureOrganization of the United Nations (FAOSTAT) due to different reporting schedulesamong countries and the fact that data is not updated in a timely manner;Value Chain/Market Analysis-Orthodox Tea 5
Page 1: VALUE CHAIN/ MARKETANALYSIS OF THEO
Page 5 and 6: ACRONYMSANSABAECBIMSTECCooperationC
Page 7 and 8: EXECUTIVE SUMMARYThe Nepal Economic
Page 9: 1. INTRODUCTION1.1 BackgroundANSAB
Page 13 and 14: Figure 2: Production trend of tea f
Page 16 and 17: The low availability of green leaf
Page 18 and 19: Table 1 Impact of organic transitio
Page 21 and 22: 2002/3, 2003/4, and 2004/5 till 200
Page 23 and 24: CountryImportfromWorldWorldimportSh
Page 25 and 26: orthodox tea is consumed domestical
Page 27: 3.2 FunctionsThe major functions in
Page 30 and 31: from Germany are halssen and Lyon G
Page 32 and 33: organization also serves as a forum
Page 34 and 35: Green leaf is priced depending upon
Page 36: · Increasing world demandEnabling
Page 39 and 40: · Nepal is highly dependent on Ind
Page 41 and 42: 5. STRATEGIC AREAS FOR NEAT INTERVE
Page 43 and 44: 5.1.2 Processing· Assist in obtain
Page 45 and 46: conducted for its brand establishme
Page 47 and 48: the tea industry. The program shoul
Page 49 and 50: 7. ANNEXESAnnex 1: List of Major Im
Page 51 and 52: B. Those capable of buying up to 5,
Page 53 and 54: Annex 3: Export data of different c
Page 55 and 56: Annex 6: Top Tea Producing Countrie
Page 57 and 58: Annex 8: Types of Orthodox TeaLeaf
Page 59 and 60: Annex 10: Export Data (ITC, 2011)A.
Page 61 and 62:
ImportersAnnex 11: Import Data (ITC
Page 63 and 64:
ImportersC. Worldwide import of gre
Page 65 and 66:
Annex 12: List of PSDM Participants
Page 67 and 68:
SNAnnex 14: Orthodox Tea Producing
Page 69 and 70:
26Sagarmatha Tea Estate,Tamrakhop,
Page 71 and 72:
Annex 16: Orthodox Tea Sector Cost/
Page 73 and 74:
BLong term1 Establishment of traini
Page 75 and 76:
Annex 18: Estimated production leve
Page 77:
131415Sakhejung HillRange TeaProces
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