The Hindu Business Line : Quality fears grip tea sector as exports rise

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Quality fears grip tea sector as exports rise

Industry suspects soaring price could lead to adulteration.

Plenty brewing
According to Tea Board data, exports up to July increased to 105.66 mkg, valued at Rs 1,096 crore.
Exports to Egypt have increased by two mkg, while they have gained over one mkg to the UAE and Iraq.

M.R. Subramani

Chennai, Sept. 18 Tea exports up to July this year have topped the 100 million kg (mkg) margin. In normal circumstances, the industry should be happy after shipments fell last year by 30 mkg to 178.75 mkg. But this time around, fear has gripped the sector on the sustainability of the export market, especially with rumours doing the rounds on the quality of exports.

“There are serious concerns over the quality and suspicion is that some consignments could be adulterated. The best thing the Centre can do is to make it mandatory for all tea exports to undergo inspection at least until June next year,” said Mr N. Sriram, Chief Executive Officer of Contemporary Tea Auctioneers Pvt Ltd.

“We have opted out of exports to Egypt since the margins are becoming thin and speculators have taken over,” said Mr N. Dharmaraj of Harrisons Malayalam Ltd.

Industry sources say prices of tea at the auctions have increased so sharply that to export tea at prices contracted a couple of months ago would be a loss-making proposition. “This is despite the fall in the rupee value against the dollar,” they said.

“After a very long time, we have resumed exports to Egypt. Last time, the African nation stopped our tea on quality grounds. We sincerely pray that such a thing will not happen again,” said Mr Sriram.

According to Tea Board data, exports up to July increased to 105.66 mkg, valued at Rs 1,096 crore. This is some 17 mkg and Rs 186 crore more than the same period a year ago. Exports to Egypt have increased by two mkg, while they have gained over one mkg to the UAE and Iraq. Currently, Pakistan has also begun to buy Indian tea heavily.

‘Scientific’ adulteration

What has shaken the industry badly is the Tea Board’s unearthing of a couple of units adulterating tea. In one of the cases, a firm, claiming to be Asia’s largest and a big exporter to Pakistan, was fould adulterating tea with orthodox tea wastes and a chemical. “The Central Food Technological Research Institute, Mysore, is yet to identify the chemical that was used for adulteration. The chemical is difficult to handle and dangerous to health. The unit even had a research and development lab to adulterate tea scientifically,” said Mr R.D. Nazeem, Executive Director of Tea Board. The other interesting aspect is that the unit, functioning in Coonoor, Tamil Nadu, employed non-Tamil speaking workers to ensure secrecy.

“The Tea Board has issued show cause notices to nine factories and 14 brokers on the quality isssue,” he said, during a presentation at the 115th annual conference of the United Planters’ Association of Southern India (Upasi) in Coonoor.

The reason why the plantation industry is more worried now is because prices for all sorts of tea have gone up sharply. Last week, even CTC (crushed, tear, curl) dusts touched Rs 100 a kg. “When prices go up so high, some unscrupulous elements could try to take advantage of the situation and indulge in adulteration,” the sources said.

The issue of adulteration was raised at Upasi’s conference during the “Commodity Outlook” session with Mr P.K. Chaudhery, Additional Secretary in the Ministry of Commerce, and Mr Basudeb Banerjee, Chairman of Tea Board.

“A mechanism may be required to ensure quality of exports, especially by merchant-exporters. But we will also have to ensure that it should not delay shipments. We have introduced the Tea Board logo scheme which has quality parameters that are above those of the US Food and Drug Administration,” Mr Banerjee said.

“The Centre is looking into the issue of quality of exports. We will have to work out a system that will be acceptable to all and will also ensure no delay in shipments.We should be able to find a way soon,” said Mr Chaudhery.

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Tea exports breach 100-mkg mark
Tea Board plans raids to check adulteration

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