Financial Daily from THE HINDU group of publications
Saturday, Oct 04, 2003
Financial Daily from THE HINDU group of publications Saturday, Oct 04, 2003 |
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Agri-Biz & Commodities
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Tea Tea export earnings seen slipping to 8-year lows Our Correspondent
Coonoor , Oct. 3 EXCESS stock is feared to reduce the tea industry's export returns to eight-year lows if serious steps are not taken to augment earnings in the last quarter of 2003. The Accenture study initiated by the Tea Board has warned: "In the absence of any action, export volumes are likely to decline to 170 million kg by 2006 — an optimistic estimate, given the current situation." But right now, it appears that unless drastic improvement takes place in the last quarter, exports in 2003 itself would dip to 170 million kg from 198 million kg in 2002. An impression generally prevails among importers that India is now suffering from excess stocks and it is desperate to siphon off even by under-pricing. This surfaced during the Pakistani delegation's visit, with the importers making it clear that they could easily get Indian teas for 85 cents a kg even as they were paying $1.85 for Sri Lankan teas and $1.70 for Kenyan and Rwandan teas. The delegation members had backgrounders telling them clearly in the first seven months of this year, India produced some 9 per cent more tea than the same period of last year, but shipped out about 29 per cent lower. In other words, there is an excess production of 32 million kg and unsold export of 28 million kg, collectively posting some 60 million kg excess in availability. The Indian tea industry is banking on the new-found but unpredictable Iraqi buying. If the additional 60 million kg are not absorbed by the domestic market, the industry would clearly head for a glut-induced price crash. Already, according to the Tea Board, export earnings have fallen by Rs 217 crore in seven months.
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