The Hindu : Business : Tea exports set to decline

Online edition of India's National Newspaper
Saturday, Dec 29, 2007
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Tea exports set to decline

Special Correspondent

Loss of marketshare in Pakistan, Iraq
Higher unit realisation expected this year

KOLKATA: Tea exports from India may register one of its biggest drops this year. According to information available with the regulator, the Tea Board of India as well as the Indian Tea Association (ITA), the apex industry agency, exports are being projected at about 180 million kg in 2007 against 218 million kg exported in 2006.

Exports during the January-October period are already lower by 42 million kg. Loss of market-share in Pakistan and lower exports to Iraq were some of the main reasons although the 15 per cent appreciation in rupee over the last 12 months also contributed to the drop.

In a status paper released here on Friday, the ITA said that there was an urgent need to halt the downward trend in exports, particularly from South India. Pointing out that boosting exports will be the main challenge of the industry, the ITA said that since the beginning of 2007, the Indian tea industry had been experiencing lower crop and lower exports.

Confirming the trend, Tea Board officials said the one silver-lining was that while cheaper quality tea exports have declined, prices have improved and unit-realisations were expected to be higher this year at about Rs. 97.79 against Rs. 91.73 the year before.

Exports to Iraq are expected to be between 25 million kg and 30 million kg lower in 2007 mainly on account of payment problems. The ITA paper said that as per destination-wise figures available for the January to July period, except marginal increases in exports to UAE, Iran and Afghanistan and to some extent Russia, all other countries have shown lower imports from India.

It may be mentioned that the Tea Board and the ITA had taken several initiatives to boost exports to Egypt, Pakistan and Russia. These improvements have not yet been noticed although there is optimism that things may improve in 2008.

For quite sometime, India has been having the fourth position in the world tea market after Sri Lanka, Kenya and China. This is mainly due to its high production costs.

Tea production is being projected at 940 million kg in 2007 against 956 million kg in 2006.

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