The Hindu Business Line : Tea exports down in volume, earnings

With the prices fluctuating heavily and the domestic market paying more than the overseas trade, a target for the value gains relevance along with the volume target.

Coonoor April 11 Tea exports in 2007 are trailing compared with last year in respect of both the volume and earnings. An analysis of the information available with the Tea Board shows that in the first two months of 2007, the earnings suffered despite a marked increase in the unit price fetched because of the volume falling short of last year.

In January and February 2007, Indian tea fetched an average price of Rs 95.97 a kg — as much as Rs 13 a kg more than the same months of 2006. But, the higher price reduced the intake by the importers and the volume shipped dropped to 24.9 million kgs from 31.3 million kgs.

Higher Price

Consequently, the overall earnings slumped to Rs 238.9 crore from Rs 256.8 crore. The shipments dropped in respect of both the North and South Indian teas. The North Indian teas fetched an average price of Rs 116.67 a kg - as much as Rs 11 more than last year. But the higher price led to the intake by the importers falling to 11.6 million kgs from 14.4. Consequently, the overall earnings dropped to Rs 135.9 crore from Rs 152 crore.

The South Indian teas fetched an average price of Rs 77.77 a kg — as much as Rs 15 more than last year. But, this led to the volume dropping to 13.2 million kgs from 16.9 million kgs. Consequently, the overall earnings fell to Rs 103 crore from Rs 105 crore.

Augment Earnings

No export target for 2007 is known to have been fixed by the Tea Board or the industry. For last year, the Union Minister of State for Commerce, Mr Jairam Ramesh, had announced a target of 200 million kgs. The actual shipments exceeded this to reach 203.86 million kgs.

But, with the prices fluctuating heavily and the domestic market paying more than the overseas trade, a target for the value gains relevance along with the volume target.

Last year, for instance, despite the volume exceeding the target, the earnings stagnated at Rs 1,830.98 crore because the unit price had risen only marginally - Rs 2.17 a kg - over the previous year when the volume risen was also marginal - 4 million kgs.

Since no target was fixed for the value, there was no way to elate on this score.

In the current calendar, Indian teas are gaining significantly in prices, but with no value target, focussed attention to augment earnings might be affected as importers shy away when prices rule high.

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