The Hindu Business Line : Exporters bag orders for 8 mkg tea from Iraq

INDIA has bagged almost 50 per cent of the fourth tranche of tea export orders from Iraq, underlying the fact that exports to Iraq is more than looking up.

Trade sources told Business Line that India bagged 8 million kg (mkg) of the 16 mkg ordered by the Iraq Ministry of Trade, the State Company for Food Handling.

The contract was awarded to 24 Indian merchant exporters across the country. One mkg has been bagged by Sri Lanka, three mkg by Indonesia and the remaining by Vietnam.

Trade sources said price constraints had prevented sourcing a larger quantity from Sri Lanka, an otherwise favoured country.

``The price quoted by the Ministry of Trade is reportedly not acceptable to the exporting nation,'' sources said. .

The contract is to supply grades of FBOP, BOP1, BOP at CIF (cost, insurance and freight) prices. The deal was struck at $1.25 cents per kg for the FBOP grade, $1.23 per kg for BOP1 and $1.12 per kg for BOP. The shipment must be done in 45 days from the opening of the LC. ``We expect LCs to be opened by end-May,'' a leading merchant-exporter to Iraq told Business Line.

Of the export order of 20,000 tonnes issued earlier by Iraq under the World Food Programme, India had bagged 8.2 mkg. The contract had been awarded to four tea merchant exporters. The deal was to supply OP, Pekoe, FBOP, BOP1 and BOP grades at 95 cents to $1.30 cents per kg at FOB prices.

Of this tranche, Vietnam bagged a larger quantum compared to India largely on account of the price differential. Sri Lanka bagged around 2 mkg and Indonesia 1.8 mkg. Sources said it had to be delivered by June, with payment being done on despatch.

Even as there is growing optimism that India will get continued support from Iraq, there are concerns over whether exporters will fulfil their commitments given the shortfall in orthodox tea production in the country. Trader sources are also unhappy that lot of fuss was being made about using imported teas to cover export quantum.

``With orthodox quantities offered at South Indian auction centres (Coimbatore, Coonoor, Kochi) being around 2.3-2.5 lakh kg per week, will we able to cover the stipulated quantity in time? While the onset of monsoon may improve crop levels, it will not be up to the level required,'' sources said.

Indian exports to Iraq for 2003 stood at 12.7 mkg against a whopping 44.2 mkg during 2002. Imports in 2003 stood at 6.77 mkg. However, industry sources believe imports for this year could be higher.

``Imports as of January 2004 is around 0.83 mkg — almost double the 0.39 mkg imported during the corresponding period in 2003. There is talk of premium tea from Kenya coming in primarily for value-addition,'' sources said.

As per Upasi data, exports for January-March 2004 were higher at 37.13 mkg against 29.8 mkg in the corresponding period last year. Of this, South India's share stood at 20.79 mkg (13.60 mkg last year in this period) while the rest was North India's share.

More Stories on : Tea | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Free power to farmers to be first decision: Rajasekhara Reddy

Rubber prices remain unchanged

Govt may extend subsidy for addl rubber exports

Exporters bag orders for 8 mkg tea from Iraq

Dubai to have global tea trading centre soon

Gold, silver up on weak rupee

Pepper prices turn hot

Spices Board launches initiative to improve produce quality