The Hindu Business Line : Tea exports may be hit

Despite efforts to promote Indian tea in the international market, tea exports in 2007-08 are likely to be lower than the 203 million kg (mkg) shipped in 2006-07.

In 2006-07, the net tea export was around 185 mkg, almost the same as that in 2005-06. "We will be happy if we can reach the last year's level", said Mr Jairam Ramesh, Union Minister of State for Commerce, here on Saturday.

Mr Ramesh would attribute the current year's not-so-happy export prospects to two factors. First, the bumper crop in Kenya, a major supplier of tea to Pakistan, which has been targeted as one of the thrust countries by India for the purpose boosting tea exports. Second, the appreciation of the rupee. The demand for Indian tea will be lower than before in price sensitive markets which also include Pakistan. Last year, India exported 16 mkg of tea to Pakistan, an all-time high, and was hoping to do even better this year. However, the situation this year looked different with the change in market dynamics.

Mr Basudeb Banerjee, Chairman of Tea Board, indicated that the weather being somewhat indifferent, the crop prospects too appeared to be uncertain.

"We're watching the situation and let us see what happens," he said.

Guideline changes

Earlier, addressing the annual general meeting of the Indian Tea Association, Mr Ramesh stated that the some changes in the guidelines of the Special Tea Purpose Fund had become necessary in view of the poor response to the fund from the South Indian gardens. This was because the cost of production in the south Indian gardens was more than that in Dooars (West Bengal) or Assam.

He said that the Oberoi Group, the owner of the international chain, might be involved in the establishment of a tea promotion and marketing centre in Cairo. Earlier, it was thought that the centre would be a joint venture between Indian Tea Association and the Tea Board. "Since we're having problems in identifying a suitable location for the proposed centre, the Oberoi Group running a huge hotel in the Egyptian capital, could help us in this regard," he said and pointed out that the response so far had been positive.

Tata Tea and Tata Coffee, the Minister said, in partnership with local institutions, was exploring the scope of the Indian tea and coffee brands in Russia. Russia is a major buyer of both tea and coffee from India. The tea export to Russia was 32 mkg and the country accounted for 22 per cent of India's coffee export, the second largest buyer after Italy accounting for 27 per cent.

Confirming the development, Mr Percy Siganporia, Managing Director of Tata Tea, said the details were still being worked out. Russia was a major buyer of Tata coffee, he said.

The Tea Board Chairman, in his speech at the ITA AGM, indicated that allocation for the tea industry in the 11th Plan would be substantially more than that in the 10th Plan - an estimated Rs 1,000 crore in the 11th Plan, up from Rs 350 crore in the 10th Plan. A part would be made available under the newly-launched Special Purpose Tea Fund, while the details of the allocations for other schemes were still to be finalised. The other schemes would include plantation development scheme, quality upgradation schemes, market development scheme, R&D and HRD. The allocation for the labour welfare would be stepped up to Rs 50 crore from Rs 5 crore and similarly new initiatives were under way for the increasing the production of orthodox teas and stepping up R&D activity in partnerships with ISRO, IITs in Kharagpur and Guwahati. The tea auction scheme too was being reinvented, he said.

High production cost

Expressing concern at the high cost of production in tea, Mr Siganporia, as Chairman of ITA, drew attention to the high cost of electricity and gas. He blamed power utilities for the being "insensitive " to the issue of "irrationally set" contract demand with little regard to winter dormancy and three months of no-production in the industry. The frequent disruption in the supply of gas to several tea gardens in Assam had been a matter of concern which should be addressed by the Ministry of Petroleum and Natural Gas.

Mr Aditya Khaitan, Vice-Chairman of ITA, proposed the vote of thanks.

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