News: Indian tea brews ill on foreign shores

(DNA 30/06/2006) Kolkata - The volume and value of teas crossing the Indian shores are on the decline. Not only did exports fall short of the much-touted 200 million kilogram mark in 2005-06, but actually fell by 25 million kg in volumes, with the biggest hit coming from Russia, CIS countries and Iraq. In terms of value, exports fell by over 15% to Rs 1,631.60 crore.

According to the latest Tea Board data, the CIS countries, which still form the largest block of countries buying Indian tea, bought 10 million kg less in 2005-06. Exports to Russia and Kazakhstan and to once-sought-after markets like UK, Poland and Ireland also fell.

Teas exported to Iraq fell from 38.38 million kg in 2004-05 to 28.69 million kg in 2005-06. Industry officials said the decline was mainly because of it getting out-priced in international markets by Kenyan and Sri Lankan brews. In fact, as most of the teas exported to Iraq were through re-exports, lower imports of tea had an effect on the overall exports to this country.

A leading tea exporter-producer said, “The exact reasons for the decline on a country-specific matrix are being analysed, but overall, prices during the period have been low on account of excess supply, apart from the generally high prices of Indian tea compared to other countries. We are trying to cope up with the problem as the Indian tea industry happens to have one of the highest cost of production in the world.”

Industry officials are, however, betting high on exports to Pakistan, one of the largest tea drinking nations. The country has committed to buying 20 million kg of tea from India alone. The country exported about 10.57 million kg of teas to Pakistan last year.India has also set its eyes on the Egyptian tea market this fiscal.