The Hindu Business Line : Tea imports up as cheaper Vietnam grades find takers

Tea imports into the country have increased by 33 per cent to 16.79 million kg (mkg) during January-September this year compared with last year. In fact, the imports have exceeded the shipments that came into the country the whole of last year.

Per kg cost

As per Tea Board statistics, imports during January-September have been valued at Rs 85.44 crore with per kg unit costing Rs 50.88. Compared with this, during the whole of 2005 imports totalled Rs 72.67 crore with each kg coming into the country costing Rs 57.90.

According to trade sources, imports are mainly cheaper quality teas from Vietnam. "No doubt, 98 per cent of the imported tea is exported but the imports, in a way, show a lower per unit realisation of our exports," they said.

During January-September, exports from the country were 131.55 mkg valued at Rs 1,161 crore with every kg of shipments averaging Rs 88.31. This is against 131.13 mkg worth Rs 1,243 crore exported last year. Each kg shipped from the country fetched Rs 94.85.

Recovery

Tea imports into the country are showing recovery after 2004, when it touched a record 30.80 mkg, valued at Rs 141.32 crore. In fact, rise in tea imports has been alternating since 2002. (See table)

"After the imports touched 30 million kg in 2004, the Centre came up with regulatory measures. It stipulated that imports should meet Prevention of Food Adulteration Act standards," the sources said.

In the new Tea (Distribution and Export) Control Order, 2005 under the provisions of the Tea Act, 1953, the Centre stipulated that all consignments meant for imports or exports would have to undergo a certification procedure under which the quality of tea and the country of its origin would be determined and displayed.

The Tea Board was made the nodal agency of the certification exercise. The order also prescribed a minimum value-addition norm of 50 per cent on export of imported tea and stipulated a time period of six months from the date of import to export the same.

Interesting aspect

"One interesting aspect of imports are that they tend to rise whenever our exports to Iraq rise," the sources said.

Iraq is one of the main factors that has helped exports hold ground this year. According to industry sources, exports to Iraq were up at 27 mkg during January-August against 16.3 mkg during the same period a year ago. During January-November 2005, tea exports to Iraq totalled 25.89 mkg. In 2004, the shipments were 22.87 mkg.

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