The Hindu Business Line : Tea exports dip in May; output up 8.6 m kg

TEA exports fell sharply by five million kg (mkg) in May, wiping out in one stroke all the gains made in shipments during the calendar year. On the other hand, production has continued to increase, with output rising by 8.6 mkg in May.

According to data made available from the Tea Board, exports declined to 10.08 mkg in May from 15.98 mkg during the same period a year back.

During the same period, production was up 5.7 mkg from the year-ago period to 47.3 mkg.

For the calendar year, exports have declined to 62.88 mkg against 65.04 mkg last year.Though exports for the current year began with a marginal decline, they made good headway during the February-April period.

After shipments touched 14.48 mkg in February, the story has been one of decline. Last year, May was one of the periods when exports were at their best.

According to Mr Ullhas Menon, Secretary-General, United Planters' Association of Southern India, exports would be good this year.

"Orders for the Iraq markets are being executed and a lot of buying is taking place."

Production is up by 31.1 mkg for the January-June period over last year to 220 mkg. It has increased in all growing areas across the country.

In Assam, it is up by 18.4 mkg to 98.4 mkg, while in West Bengal the increase is 5.2 mkg to 42.2 mkg. In the South, output has gone up by 7.4 mkg to 78.7 mkg.

"Tea production has increased in all the growing nations due to very good rains," Mr Menon said.

Meanwhile, exporters have not been able to make much headway in the Pakistani market.

"Nothing much is happening for us there," sources said, adding that buyers for the neighbouring market were buying small quantities at Rs 30-35 a kg.

Purchase by Russia, one of the key markets for India, has also been tardy.

"The trend is the usual one we have witnessed during the last two years. They are buying more of orthodox tea from countries such as Sri Lanka," the sources said.

However, the Tea Board is trying to convince Russia to buy more Indian tea. "A delegation is being planned to Russia by the Tea Board," the sources said.

According to Mr Menon, Upasi is also planning to take a delegation to Russia.

From exporting over 100 mkg to Russia and CIS countries until late in the 90s, India now exports hardly 60 mkg to the region.

A flexible credit facility and deal to buy arms for tea by Sri Lanka have dented India's market in that country. Though Russia has been assured 100 mkg from the country, it has not been happening.

The industry has begun to look at other markets, particularly West Asia, Iraq, and Iran. This is likely to help exports to some extent, according to the sources.

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