South Africa rooibos tea exports to grow after China tariff cut

The recent decision by China to significantly reduce tariffs on imports of South African rooibos tea is expected to boost export volumes and create additional jobs in the industry. China, the world’s biggest tea market, previously imposed tariffs ranging from 15% to 30% on this herbal tea, known for its deep red hue. However, during last year's China-South Africa Joint Economic and Trade Commission meeting, South Africa asked China to reconsider the classification of rooibos tea and to lower the duties. This request has led to a reduction in tariffs to 6%.

Rooibos, an Afrikaans term meaning 'red bush,' is a tea derived from the rooibos plant, cultivated in South Africa's Western Cape province. South Africa produces approximately 20,000 tonnes of rooibos annually, providing employment for over 5,000 people.

Believed to offer numerous health benefits, rooibos is rich in antioxidants, caffeine-free, and suitable for consumption by children, infants, and breastfeeding mothers. The tea, a staple in southern Africa for generations, has gained international popularity since the 2000s. It is now exported to dozens of countries, with Germany, the Netherlands, Japan, the UK, and the US as major markets. In 2014, the European Union granted rooibos tea geographical indication status, ensuring that only tea from South Africa's Cederberg region can be labelled as such, similar to Champagne from France.

In 2022, shipments of rooibos to China accounted for less than 4% of total exports. Last year, these volumes grew by 250% – from 100 tonnes to 350 tonnes, making China the seventh-largest export market for Rooibos tea. In China, the tea, marketed as a caffeine-free beverage, has gained popularity among health-conscious individuals. While Japanese consumers often prefer it straight, Chinese establishments frequently mix it with other flavours and ingredients, which has led to the creation of drinks like hot or cold rooibos 'cappuccinos’, rooibos smoothies blended with fruit, and rooibos mulled wine.

The reduction in duties on rooibos is part of a broader trend where China has significantly opened up its market to agricultural produce from Africa. In recent years, China has allowed entry for an increasing array of African food items, including Kenyan avocados and anchovies, Ethiopian coffee and soybeans, beef products from Namibia and Botswana, and Rwandan chilli. This shift aligns with President Xi Jinping's initiative to establish ‘green lanes’ for African agricultural exports, expedite inspection and quarantine procedures, and expand the range of products eligible for zero-tariff treatment.

 

References

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