The Hindu Business Line : Indian tea set to make inroads into Egypt, Pakistan

The Indian tea sector is in the process of making deep inroads into the Egyptian and Pakistan markets, which were catered to mostly by Kenyan exporters till last year.

According to reports available from different sources, the global tea industry is apprehending a major shortfall in the Kenyan tea production because of a drought in that country.

"We are hearing that production would be down by 25-30 per cent. If that happens, then there would be a major scarcity of teas in the Pakistani and Egyptian markets," sources in Indian Tea Association said.

Both Egypt and Pakistan are CTC drinkers and Kenya is a major CTC producer. Annual tea consumption of tea in Egypt and Pakistan is 100 million kg (mkg) and 130 mkg respectively.

Kenya's average annual tea production is 328 mkg. The Kenyan tea exporters used to cater to 90 per cent of Egyptian and approximately 65 per cent of Pakistani demands.

Sources said the Indian tea producers and merchant exporters had been receiving several queries from Egyptian and Pakistani authorities since November.

Earlier, Indian tea exporters were uncompetitive in the Egyptian market due to several tariff barriers. However, over the last two years the corrections have been made and Indian players currently don't face any major hindrance.

Egypt imports tea, including other commodities, through two State trading corporations - Al Misr and Al Nisr.

Export prospects are bright in Pakistan too. In fact, Indian tea exports to Pakistan jumped significantly to 9.23 mkg in 2005 from 3.38 mkg in 2004.

However, the average price realisation dropped marginally to Rs 43.61 a kg from Rs 44.17.

Despite the positive developments, some Indian tea exporters are sceptical of reports of the Kenyan tea drought. According to them, production cannot fall to the extent of 30 per cent.

They feel that the Kenyans are trying to take advantage of the existing scenario and trying to draw down inventories by drawing a grim picture.

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