EP1682 Part 2 of 5 | How Tea Is Priced and Traded (Jem McDowall) Map It Forward

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Episode Description

This is part 2 of a new 5-part series on The Daily Coffee Pro Podcast by Map It Forward, hosted by Lee Safar. Our guest on the podcast for this series is Jem McDowall, VP at Universal Commodities.

In this episode, Lee and Jem explore how tea is priced, bought, sold, and financed across the global supply chain.

Jem explains how major tea auction systems operate in markets including Kenya, Sri Lanka, India, Malawi, and Indonesia, and how buyers evaluate lots based on origin, appearance, cup profile, grade, and market demand.

Unlike coffee, tea does not have a futures market.

Instead, a significant portion of global black tea production is sold through physical auctions where buyers bid on actual tea and are required to take ownership of what they purchase.

Jem explains how reserve prices are established, how buyers compete for lots, and how the old open-cry auction system introduced a remarkable amount of strategy and psychological warfare into the trading process before auctions largely moved online.

The conversation also examines how tea is packed and sold, why lot sizes vary, and how published auction prices become reference points for the broader physical market.

But the most striking contrast with coffee comes around payment.

Jem explains that buyers at tea auctions typically have around 10 to 14 days to pay, and the tea is only released once the money has been received: no money, no tea.

That leads Lee and Jem into a wider discussion about financing across agricultural supply chains, including why producers in tea are generally not expected to finance consuming markets in the same way many coffee producers still are.

The comparison raises difficult questions about where financial risk sits in coffee and why producers at origin continue to carry costs that, in other commodity systems, sit much closer to the buyer.

Connect with Jem McDowall here:

https://www.linkedin.com/in/jem-mcdowall-826932b/

Universal Commodities:

https://uctt.com/

If you found this episode valuable, make sure you’re subscribed to the podcast and follow along for the rest of this 5-part series.

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About Map It Forward

The Daily Coffee Pro is produced by Map It Forward, supporting coffee professionals globally across the supply chain.

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