Consuming goods and goods from distant countries is an indispensable part of the vast majority. We live in a connected and globalised world where it has become completely self-evident to have access to products from the other side of the globe. How could we have such a thirst for goods as tea, which have hardly any roots in our culture? In the first part of our new series Tea Trade 101, we wanted to introduce you to the world from the point of view of a tea merchant and explain how tea is traded.

 

Caffeine Tea Field India Tea Trade

The first tea trade routes

Nowadays, it is relatively easy to ship goods around the world. Container ships, aircraft and freight trains allow us to send goods around the globe within a few days and weeks. Some time ago, however, it was very expensive and time-consuming to procure exotic goods from foreign countries. Shipping tea from China to Europe often took 6 months or more. Since sailing ships were still used at the beginning, the travel time was unpredictable and varied greatly. In addition, the long crossings were further endangered by storms and piracy. With the advent of steamships, time at sea would become more predictable and the risk of losing ships on the high seas became less and less.

The route taken by the ships at that time was also significantly different. Nowadays, most ships pass the Suez Canal in Egypton their way from Asia to Europe. In the past, however, the ships had to take a much longer route around Africa and the Cape of Good Hope.

Tea trade route tee trade route hong kong london tea trade
Tea Trade Route from Hong Kong to London

Dealers in the race to the east

The word joint stock company makes many believe that a company trading in shares is a fairly modern invention. In fact, the principle of a public limited company is already several hundred years old. Two public limited companies in particular have had a particular impact on global trade, as well as on the tea world. The speech is, on the one hand, of the British East India Company, founded in 1600, and the Vereinigde Oostindian Compagnie, or VOC, or VOC, which was founded in 1602.

What made these two companies particularly successful was their new corporate structure. In the 17th century, the risk of losing a ship on an expedition was still quite high. Investing in an entire ship and losing it overseas was like safe bankruptcy. Getting money for such missions was extremely difficult. The famous navigator Christopher Columbus, for example, took a long time to convince the Spanish crown to provide him with a few ships. Seafaring was simply a risky affair (Columbus lost a total of nine ships on his voyages).

So instead of having to spend huge sums on expensive ships and crews, the VOC and theBritic East India Companyallowed them to buy small shares in trading expeditions in the form of shares in order to spread the risk of loss. Losing a ship was (financially) much less bad if you owned only a few percent of the ship. This allowed investors to invest in many different trade expeditions and be sure that one or the other ship would come back with exotic goods and expensive spices and make big profits.

 

Trade Ship Indiamen Warley oil painting tea trade Teehandel
The picture shows the “Warley”, one of the merchant ships of the East India Companie. © National Maritime Museum, Greenwich, London. Caird Fund.

Money for merchant ships

The whole system was also supported by the Dutch State, which protects private property and ensured that everyone adhered to their contractual arrangements. The British went even further, securing their company the right to establish a trade monopoly. By contrast, the royals in France and Spain raised money from loans that they put into armies and unnecessary wars that pulverized the money. as a result, they ran out of investors and were no longer able to get enough capital for new merchant ships. The British and the Dutch had free rein.

Demand for exotic goods such as tea was highly inelastic in Europe at the time, which means that demand has always remained very constant, regardless of the price of the goods. In contrast, even minimal fluctuations in the supply caused extreme fluctuations in the price of the goods. The wealthy clientele didn’t care what they had to pay. The main thing was that they got what they wanted. So tea, especially in the UK, became a status symbol and everyone wanted to own it. Many were enthusiastic about the new and exciting goods from distant countries.

Over time, the Dutch focused more on trade around the region around Indonesia, where they traded mainly in spices such as nutmeg or cinnamon. The British, on the other hand, annexed the Indian subcontinent. Meanwhile, tea in the UK and parts of Europe has shifted from luxury goods to everyday products. The traded amount of tea increased and slowly pushed the price down. The tea trade continued to grow and demand increased.

After the British lost their colonies in America, the treasuries were empty. There was an urgent need for a new source of income. The expensive tea trade with the Chinese eventually led to a trade deficit, meaning more money flowed from Britain than came in. British resentment was also stoked by the Chinese’s strict trade requirements, which allowed trade only in certain ports, set fixed trade prices and refused to allow the British to enter mainland China.

 

The First Opium War

The Solution to their money problem was finally found by the British in Bengal, a province in India. Here, the East India Company promoted the cultivation and production of large amounts of opium. As a state organization, the opium was not sold directly to China, but was sold to private traders in the port of Calcutta. The dealers eventually smuggled the opium into China and sold it there for a handsome profit. These profits were again used to buy tea from the Chinese and sell it for even higher profits in England. With this business, both the East India Company, the private traders and the smugglers in China made huge profits. In addition, the domestic need for tea was satisfied. However, not without consequences for China.

In China, meanwhile, opium became a gigantic problem. The quality of opium produced in Bengal far exceeded that produced in China, which simplified sales of opium there. The imperial house did not like this at all, which is why a man named Lin Zexu was commissioned to stop the smuggling of opium in the city of Canton, to destroy the opium and to drive out the Western traders. To prevent bloodshed, the merchants handed over the entire opium stockpile of 20,283 boxes to the Chinese on the orders of Sir Charles Elliot. Elliot promised the dealers compensation from the crown, which was completely unrealistic, as the market value of the boxes amounted to just under the entire annual budget of the British krone. The British merchants were expelled and retreated to a rocky island called Hong Kong, which was still sparsely populated at the time.

 

Tea plant tea plant green tea plant
Young buds of the tea plant

Back in the UK, British Foreign Secretary Lord Palmerston received news of the events in China. Angry at Sir Elliot’s overstepping of competence and his promise to traders, he made a plan to demonstrate British power to the Chinese and force China to pay for the destroyed opium. After all negotiations between China and the British Empire failed, the British showed all their power against the Chinese. The British troops could do little on the mainland, but by sea the British ships equipped with modern cannons were superior to the Chinese.

Along the coast, the British besieged one port city after another. Estuaries were blocked and all river traffic to mainland China stopped. The Chinese imperial house found itself powerless and eventually agreed on a peace treaty with the Empire, for which it had to make many concessions. Thus, the Chinese allowed the British to settle the island of Hong Kong in the long term and to establish a trading outpost there. In addition, further ports were opened and the previous severe restrictions on the tea trade were relaxed. Under no circumstances did the Chinese want to enter into the legalization of opium.

The Opium War symbolizes the oppressive behavior of Western colonial powers. Because of the needs of the Empire, many people in Asia, Africa or America suffered. As tea merchants, we have a responsibility to ensure that such behaviour is not repeated and that we offer our customers fair-produced tea. We also want to create transparency about our products and strengthen social trade.

 

Hong Kong and its importance for the tea trade

After the occupation by the Empire, Hong Kong developed into an important tea trading place for the British Empire. For a long time, most of the Asian teas were traded over the small island and shipped to Europe. Many well-known tea merchants still sit in Hong Kong and several tons of Chinese teas are traded via Hong Kong. The dealers there have a high reputation and a reputation for offering only high-quality goods.

The geographical and cultural proximity to mainland China and the influence of the british Empire led to the development of a separate tea culture in Hong Kong and a fusion of Eastern and Western influences. Many tea houses will find the Chinese infusion method of Gong Fu Cha, where tea with all its facets is celebrated and enjoyed. PuErh tea in particular is often drunk in the city. In the markets and restaurants, on the other hand, you will often find the famous Hong Kong Milk Tea, a particularly poured, strong black teaserved with condensed milk, much like the English like to do.

 

How Britain made itself independent of the Chinese tea trade

For a long time, the British depended on the Chinese tea trade. Only China could provide the quantity and quality needed to satisfy the thirst of Europeans. This dependence was annoying for both parties, as the British felt constrained by relatively non-free trade and the Chinese had to involuntarily surrender their goods to small profits if they did not have another power demonstration of the Empire as in the opium war.

That’s why the British wanted to grow tea themselves. In 1834, a committee was founded in the Indian city of Calcutta to deal with the provision of tea plants and seeds from China. A short time later, it turned out that tea plants were already growing in the Assam region of India. The tea plants native to India were a different variety than the plants in China, but this was proof that tea cultivation in India is possible.

 

Tea trade tea field black tea darjeeling
Tea field in the highlands of India

 

Tea from the tea plants native to India produced a stronger and more bitter drink than tea from Chinese tea plants. Both varieties are genetically related to each other, but are named as different varieties. The variety Assamica is at home on the Indian subcontinent and is slightly larger, more robust and more profitable. The Camellia Sinensis variety Sinensis, on the other hand, is native to China and is therefore also called the Chinese seed plant. Their taste is slightly milder and their leaves are smaller and more dainty. Nowadays, the transitions between the two varieties are fluid. Often both varieties were crossed to highlight certain characteristics (such as the Japanese tea plant Yabukita, which consists of 10 assamica and therefore yields high yields).

In 1848, the Scottish botanist Robert Bruce was sent on expedition to China. There he managed to get tea plants and seeds from the Chinese. He was also able to convince some Chinese tea masters to come back to India with him and pass on their knowledge there. The Chinese plants were planted in the Darjeeling region,where most of the tea plants are of Chinese origin. In Assam and the other Indian tea-growing regions, on the other hand, plants of the Assamica variety are often still to be found.

Today, india has many famous tea-growing areas, including:

  • Darjeeling
  • Assam
  • Dharamsala
  • Nilgiri
  • Meghalaya
  • Sikkim

In addition, a lot of tea is produced in Sri Lanka and the state of Nepal. Especially tea as Nepal has experienced a massive leap in quality in recent years. So we offer on our online shop two excellent black teas from the sustainably producing Jun Chiyabari tea garden in Nepal!

 

We want to revolutionize the tea trade

Britain has enforced its needs by all means, often to the chastism of others. Tea, like many other consumer goods, was and is produced under socially critical conditions. It is therefore time for us to change something in the tea trade. As dealers, we can ensure that we only offer sustainably and fairly produced teas and thereby make the world a little better. We want no one to suffer as a result of the consumption of our products and, at best, to experience an increase in their quality of life.

In the next part of our tea trade 101 series, we want to show you how we buy our tea and what distinguishes the Friends of Tea from the rest of the tea trade.

 

Time for Tea – Discover our online shop for high quality tea!

We want to be fair and make a difference. If you have become thirsty after the reading, then have a look at our online shop. Here you will find high-quality, sustainably grown and fairly produced teas to satisfy your thirst. We look forward to your visit!

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