The Hindu Business Line : Tea export earnings slide

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Coonoor Jan. 24 Tea export earnings fell between January and November 2006 — the latest period for which official figures are available — compared with the earnings of the same period in 2005. Despite an increase in the volume exported the earnings fell because of the drop in the unit price. According to the Tea Board, 170.86 million kg was exported compared with 168.25 million kg in 2005.

Export Market

More volume could be exported because the unit price was reduced to Rs 90.63 a kg from Rs 92.59. But, the reduction in price brought down the overall earnings to Rs 1,548.5 crore from Rs 1,557.8 crore, thereby proving that the volume-based target without a matching target for value does not help the industry because, the producers choose to sell their teas in the domestic market if the prices are more attractive than the export market.

This was more pronounced in the North where the producers waited for the average price to rise to Rs 124.66 a kg from Rs 117.72 in 2005.

In the bargain, they exported a lower volume of 70.5 million kg against 82.9 million kg in the previous year. Consequently, their overall earnings dropped to Rs 878.97 crore from Rs 976.07 crore in 2005.

In the South, the producers accepted a lower price of Rs 66.72 a kg against Rs 68.17 in 2005. This helped them to ship 100.35 million kg against 85.33 million kg in 2005. Because of this, their overall earnings rose to Rs 669.53 crore from Rs 581.75 crore.

At the current rate, the annual export in 2006 is likely to be around 190 million kgs — some 10 million kg lower than the target. At best, this could equate the 2005 level of 192 million kg, some exporters said.

In 2005, India earned Rs 1,737.7 crore from tea exports fetching an average unit price of Rs 90.58 a kg. The present average is marginally higher at Rs 90.63, but the volume is around 2 million kg low. To that extent, reaching the earnings of 2005 depends much on the actual shipments done in December.

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