In a significant development, the Chinese government has reached an agreement to substantially reduce tariffs on South Africa’s renowned rooibos tea, a move that carries far-reaching implications for local producers eyeing expansion in the world’s largest tea-consuming market. Confirming this breakthrough, the Department of Trade, Industry and Competition (DTIC) hailed the decision as a game-changer.
Previously, China had imposed tariffs on rooibos tea ranging from 15% to 30%, but as of January 1, 2024, these tariffs will be slashed to a mere 6%, according to an official statement released by the DTIC. The catalyst for this tariff reduction can be traced back to a meeting between South Africa’s Trade, Industry and Competition Minister, Ebrahim Patel, and his Chinese counterpart, Weng Wentao, in August. During the meeting, Minister Patel underscored the need for reclassifying rooibos and lowering the import duties.
Minister Patel expressed his enthusiasm for this development, stating, “Our rooibos tea is refreshing, delicious, and healthy. This decision will enable more South African rooibos tea to be available to Chinese tea drinkers, creating more jobs in South Africa.”
As per the Rooibos Council of South Africa, the rooibos tea industry employed approximately 8,000 farm labourers in 2021 and produced a staggering 20,000 tonnes, equivalent to roughly 6 billion cups of tea. While around 44% of this production was exported, Germany, Japan, and the Netherlands remained the largest importers, closely followed by the United Kingdom and the United States. Notably, China did not feature in the top 10 destinations in 2021, though it ranked as the seventh-largest importer back in 2019, as reported by the council.
Rooibos tea is derived from a plant native to a specific region within the Cederberg mountain range in South Africa’s Western Cape, necessitating precise climatic and geographical conditions for cultivation. In 2021, rooibos earned the distinction of becoming the first African food item to secure a protected designation of origin (PDO) from the European Union. This designation links products to their specific geographical origins, similar to France’s Champagne and Italy’s Prosciutto di Parma.
In essence, this recent tariff reduction marks a significant milestone for South African rooibos tea producers, poised to seize new opportunities in the burgeoning Chinese market, while further solidifying China’s importance as a strategic trade partner for South Africa’s economic growth and diversification.