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Pakistani tea importers are batting for quality to double imports of Indian tea. Pakistan is the third-largest importer of tea in the world and is largely dependent on Kenya.
Mohammad Shakeel Jan, Chairman, Pakistan Tea Association, who led a 11-member delegation to the Indian International Convention 2016, mainly comprising traders, said that more than political issues, their focus is on strengthening the trade relationship between the two neighbours.
Speaking to BusinessLine , on the sidelines of the convention, he said imports of tea into Pakistan are at around 2.35 lakh tonnes a year, both legal and illegal. However, India’s share is only 10 per cent despite the fact it was the first country to cater to Pakistan market way back in the 1980s. Pakistan is the largest importer of Kenyan tea with about 72.94 million kg.
Fluctuating tradeTea exports from India started again in 2000 but volumes did not pick up because of quality and other factors, said Mohammad Afzal, Managing Director, Usmania Traders, Karachi.
In the last 10 years, value of tea imports has increased to $22 million from $9.7 million. While this is good news, the fact remains that exports from India to Pakistan have not been steady in terms of volume.
In 2005-06, export from India to Pakistan was around 9.5 million kg (mkg) and it dropped to 5.7 mkg in 2007-08, but rose to 8.3 mkg in 2009-10 and further to 18.8 mkg in 2012-13 but then it dropped to 17.3 mkg in 2015-16.
During this period, the average price of Indian teas rose to $1.43 a kg in 2015-16 from $1.02 in 2005-06.
No creditAbdul Majeed Paracha of Orient Traders said that while Indian exporters give credit facilities to buyers in other countries, they don’t offerthe same to their Pakistani partners.
He noted that Kenyan suppliers give 30-40 days credit facilities, without any bank guarantees.
On quality issues, Afzal, who sources tea for different brands from India, said there are around 10-15 variants at the production stage in India, whereas in Kenya it is uniform despite the fact that Kenyan factories use machines imported from India. “The Kenyan tea taste never differs, but Indian teas don’t have uniformity,” he said.
This, is one of the reasons — despite Pakistan’s demand growing by around 3.5 per cent — that imports from India have been fluctuating, he added.
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