The Hindu Business Line : Concern over cheap tea imports

A case in point
Imports from Vietnam have shot up by 222 per cent to 7,255 tonnes in January-July 2006, as compared to 2,253 tonnes in the corresponding period last year.

Vishwanath Kulkarni

Coonoor , Sept. 15

The recent surge in cheaper tea imports, especially from Vietnam, for re-export from India has become a cause of concern for the domestic tea industry.

Taking up the issue once again, the United Planters' Association of Southern India (UPASI) has sought a stricter mechanism to monitor the quality of teas being imported for re-exports.

Tea imports for re-exports shot up 24 per cent in the first seven months of calendar 2006 at 12.1 million kg compared with 9.8 million kg in the corresponding period in 2005. Though the overall value of these imports increased by 5.3 per cent to Rs 57.95 crore, the unit value per kg declined by about 15 per cent to Rs 47.74 per kg in 2006 compared with Rs 56 per kg in 2005.

Imports from Vietnam

The bulk of the cheaper teas imported this year was from Vietnam at Rs 33.42 per kg, whereas the average prices in Southern India ruled at around Rs 49 per kg. Imports from Vietnam have shot up by 222 per cent to 7,255 tonnes in January-July 2006, as compared to 2,253 tonnes in the corresponding period last year. Iraq is the main destination for the majority of teas re-exported from India.

Threat to Indian image

Tea industry sources feel that such re-exports of cheaper teas from the country could harm the image of Indian teas abroad and that there is a need for proper monitoring of the Tea (Distribution & Export) Control Order 2005 to regulate imports.

The Tea (Distribution & Export) Control Order 2005, implemented last year, has laid detailed guidelines on imports, and imports for re-exports. The Government had implemented the order to regulate imports of cheaper teas, which had hit a high of 30.8 million kg in 2004.

Following the implementation of the Tea Control Order 2005, imports declined drastically to 16.5 million kg in 2005. However, the recent surge indicates that the fall in imports in 2005 was just an aberration and that there is a need to regulate imports further.

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