The Hindu Business Line : Tea exports to Pak seen doubling to 20 mkg

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Home Page - Tea
Agri-Biz & Commodities - Exports & Imports
Tea exports to Pak seen doubling to 20 mkg

M.R. Subramani

Overall shipments during Jan-Oct record slight dip

Chennai , Dec 12

Tea exports to Pakistan are likely to double this year despite the possibility of overall shipments to various destinations remaining flat.

According to Tea Board statistics, overall exports during the January-October period stood at 150.81 million kg (mkg) against 151.24 mkg earlier.

Slippage since Sept

The shipments had shown an upward trend between May and August but there has been slippage ever since.

The decline in exports is despite expectations of a rise on account of the Kenyan crop being affected by drought early this year.

Again, thanks to patronage from Pakistan and Iraq, the shipments are around last year's levels.

According to industry sources, exports to Russia and Commonwealth of Independent States (CIS) countries continue to dwindle.

Russia was a major buyer at least until 2000.

Until 1991, when the USSR broke up, Indian tea exports to the region were as over 150 mkg. "Till 2000, our exports to Russia totalled 100 mkg," the sources said. "During January-August, exports declined to 19.84 mkg from 22.97 mkg last year."

On the other hand, exports to Pakistan till August totalled 10.1 mkg (6.38 mkg).

"Exports to Pakistan are likely to touch 20 mkg (10.1 mkg). This has mainly helped the tea industry in the South, which accounts for most of the Pakistan-bound shipments."

During the January-September period, South India accounted for 90.9 mkg of the total exports of 150.8 mkg, the sources said.

"The sustained efforts of the tea industry to convince Pakistan on buying our tea is beginning to show some results. We have been wooing the Pakistani market since 2004. Even this year, a delegation was invited from that country," the sources said.

Despite the bomb blasts in Mumbai on July 11 this year, trade between both the countries has been unhindered.

Pakistan is the third largest tea consuming market after India and China. Its annual tea consumption is around 140 mkg, with Kenya and Sri Lanka being the dominant players.

Also, Pakistanis have been used to the taste of Kenyan and Sri Lankan teas.

Given that breaking into the market was a tough task, the progress made this year is seen as significant.

"Pakistanis prefer CTC (crush, tear curl) tea and South Indian tea caters to their taste to some extent," the sources said, pointing out to the reason for the gains made by the South.

On the other hand, exports to Iraq till August are put at 27 mkg (16.3 mkg).

"These markets are making up for the loss in the Russian market."

On why there wasn't any significant gain despite the Kenyan crop being hit by drought early this year, the sources said that the loss was not as huge as 40 mkg made out initially. "Finally, it has turned out to be only 24 mkg."

Also, Kenya had a record crop last year. The trade suspects that the carryover from last year would have helped meet the demand this year. "Kenya got a good price of $2 a kg due to this."

However, export realisation for Indian firms has been lower than last year.

During the January-September period, export realisation stood at Rs 88.31 a kg (Rs 94.85), according to the Tea Board.

Meanwhile, tea production during the January-October period has been put at 820.4 mkg (797.5 mkg).

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