The price of exported green tea has never been solely determined by Chinese tea companies. Several large Moroccan importers hold annual centralized bidding processes, with dozens of domestic tea companies simultaneously competing, and the lowest bidder winning. This buyer's market structure has long suppressed the profit margins of Chinese tea companies to a narrow range of 5% to 10%. The variables determining the final price are intricately linked: the purchase price of fresh tea leaves during the spring tea season, packaging material costs, fluctuations in the RMB/USD exchange rate, and ocean shipping surcharges. During the RMB depreciation in 2024, export companies unexpectedly gained breathing room-orders denominated in USD converted to RMB revenue increased, leading to a temporary profit rebound. However, this was merely a cyclical benefit; the real pricing power still lies with the brands.
