Position as leading global exporter has been lost, report Tang Yue and Zhang Yuchen in Beijing.

The practice of drinking and serving tea has been part of the Chinese cultural identity for centuries. The beverage, and its complicated serving ceremony, have inspired poets, writers and artists down the ages.

Pickers select the first batch of leaves this year for West Lake Longjing tea in Hangzhou. [Photo/China Daily]

Along with silk, gunpowder, paper and porcelain, the drink is one of the country's most famous products. Tea and China are synonymous, so much so that the British, noted tea drinkers themselves, use the phrase "Not for all the tea in China" to describe something they believe has great value.

Tea is the world's most widely consumed beverage after water, and Chinese teas are still highly prized: A pre-sale 500-gram batch of West Lake Longjing, a renowned roasted green tea, drew a bid of 180,000 yuan ($28,500) at an auction in Hangzhou last week. Weight for weight that made the tea 25 percent more expensive than gold on the day.

Despite the long and illustrious history, however, China is no longer the world's biggest exporter of tea.

In 2010, Kenya was the world leader, with 441,021 kilograms, while China's 302,419 kg only secured second place.

What's more, in the age of multinationals and branding, China is fast losing its name as the cradle of the drink because of a dearth of world-famous brands.

China sold 320 million kg of tea last year, earning $96.5 million in the process, amounting to roughly $3 per kg, almost 50 percent higher than the price five years ago as a result of the appreciation of the yuan and rising labor costs.

Brand China

"We mainly sell tea as a raw material rather than a branded product," said Li Jiaxun, board secretary of Zhejiang Tea Group, China's largest tea exporter and the world's leading exporter of green tea.

Zhejiang Tea sells its tea in Africa, the largest importer of Chinese tea, and also Europe and the US, although they account for less than 10 percent of the company's market overseas.

"The profit margin is only about 5 percent, and sometimes we even lose money," admitted Li.

China provides 80 percent of the green tea on the global market, which is supposed to give a country a bigger say in the pricing of the "soft" commodity. However, the country's voice has gone unheard in recent years. Although more than 400 companies in China export the beverage, only three of them sold more than 20 million kg overseas in 2011, while 260 sold less than 100,000 kg.

Li said the number of tea exporters has been rising in recent years, since the government abandoned its system of quotas and licensing restrictions on tea exports in 2006. Moreover, the newcomers have been engaged in a price war, expending valuable energy that they could otherwise have been harnessed in promoting the product instead.

"It is a pain that we have to endure during this period of transition," said Cai Jun, director of department of tea, drinks and horticultural products under the China Chamber of Commerce for the Import and Export of Foodstuffs, Native Produce and Animal By-products.

He said that before the reforms only a few State-owned companies were allowed to export tea, but they had little conception of brand awareness. Meanwhile, the problem for today's private enterprises is that they don't have enough money to undertake promotions overseas.

"In the other major exporters such as Sri Lanka and Kenya, the government takes a leading role in the tea industry. But tea only accounts for a very small part of our country's total exports (0.0027 percent in 2011) and the trade in other agricultural commodities takes priority," said Cai.

"But China used to be famous for its teas, so it's important that we restore it to its former glory."

A tea farmer checks the quality of new leaves at Meijiawu in Hangzhou, Zhejiang province, an area famous for its fine green tea. [Photo/China Daily]