ROME, July 14 (Xinhuanet) -- World tea production continued to reach new highs in 2004, and the output grew by 2 percent to reachan estimated 3.2 million tons, according to a FAO report Thursday.

    The report, prepared for the Intergovernmental Group on Tea meeting in Bali (20-22 July 2005) to review the current world tea market and its medium-term outlook, said the expansion in production was due mainly to the increases recorded in Turkey, China, Kenya, Malawi, Sri Lanka and Indonesia.

    The growth in output from these countries more than offset declines in other major producing countries, including India and Bangladesh.

    In China, tea output for 2004 approached the 800,000 tons milestone as policy initiatives to promote production and trade oftea began to have an impact on the sector, it said.

    In Sri Lanka, production increased slightly by 1.3 percent to 309,000 tons in 2004. In Indonesia, where a 1.2 percent growth wasrecorded, output reached 170,000 tons in 2004. In Turkey, production was reported to have expanded dramatically in 2004 as output increased by 32 percent to reach around 205,500 tons, due to higher yields.

    Tea production in Kenya increased by more than 11 percent in 2004 to reach 328,000 tons. Malawi also reported a significant increase of 19 percent in tea production with output reaching 50,000 tons.

    In India, tea production declined by 4.3 percent to reach around 820,200 tons due to unfavorable weather conditions and the closure of up to 70 tea gardens in Assam.

    FAO said that world tea exports increased by 4.4 percent in 2004 to reach 1.47 million tons, as shipments from all major exporting countries increased during the year.

    Tea exports from China expanded by more than seven percent to reach 282,000 tons, and were dominated by green tea, which accounted for more than 75 percent of its total exports.

    World net tea imports continued to increase in 2004, by 1.5 percent, reaching 1.42 million tons.

    In 2004, tea prices opened at 1.56 US dollars per kg in Januaryand closed at 1.73 US dollars per kg in December, reflecting an improvement on the demand side, according to FAO.

    A recent study on the market evolution between 1993/1995 and 2001/2003 indicated that, out of 27 agricultural commodities, tea showed the second lowest variability in prices: 2 percent decline compared to 39 percent for cocoa and 38 percent for coffee. Enditem