Exports of Indian teas to Egypt remain almost suspended ever since the outbreak of political crisis in the north African nation, negatively affecting the tea shipments from the country, according to export sources.

While the impact of Egyptian crisis has made some significant impact on the Indian tea exports, the current turmoil in other north African and Gulf countries such as Libya and Yemen is impacting indirectly the Indian tea shipments, according to the trade sources and the Upasi.

Payment problems

Export sources here said that payment problems in the absence of a stable Government in Cairo, at present, had stopped shipments.

“There are enquiries from the private importers in Egypt but, we are not confident about the payment and in fact, we are afraid”, Mr Vikram Dholakia, a Kochi-based major tea exporter told Business Line .

He said the Egyptian Government used to import around 12,000 tonnes and the private sector imported 55,000 tonnes a year.

“We expect that some positive developments would take place in another week or so”, he said.

Hub

Egypt functions as a hub for the Indian tea as from there it is supplied to other markets in north Africa by the private operators, he said.

Meanwhile, the rejection of tea consignments by Iraq has also affected negatively the Indian tea exports. The importers having money problems rejected the consignments wrongly citing ostensible discrepancy in quality, he alleged and urged the Union Government to take it up with the authorities.

The activities of the India Tea Promotion Centre in Cairo, set up by the Tea Board and Upasi to promote sale of south Indian teas, have also come to a standstill as no fresh shipments have taken place for the past few months, Mr Ullas Menon, Secretary, Upasi, told Business Line .

But, he expressed the optimism that the new government which may come to power in the coming days might opt for quality teas rather than the price and other considerations and in that case chances are going to be bright for the Indian teas.

Global output

Any way, the current fall in exports to these regions would not impact the tea prices given the fall in global tea output so far this year, Mr Sanjith, Head (Commodities), Upasi said.

Kenya is the major supplier of tea to Egypt and the Kenyan production is down by 1.71 million kg to 36 mkg in January this year from 37.7 mkg in January 2010, and, hence, its exports to Egypt has also declined, he said.

There has been a decline of 13.4 million kg in January 2011 in the combined output of India, Kenya, Sri Lanka, Bangladesh and Malawi, according to the statistics available, he said. As against the output of 96.7 mkg in 2010 it was at 83.3 mkg in January 2010.

All India production dropped by 6.2 mkg to 20.9 mkg in January 2011 from 27.1 mkg in Jan 2010. The south India output in February is also lower by 2 per cent from that of the the same month last year. When added it to the Jan decline in output, the overall deficit in Jan–Feb would come to 4.5 mkg – 4.75 mkg, he said.

Kochi sale

Arrivals at the Kochi auction during Jan–March 2011 showed a drop of 1.02 mkg to 15.08 mkg from 16.1 mkg in the same period last year, Kochi Tea Trade Association sources said. However, the summer showers in the growing areas in the high ranges of Kerala and Tamil Nadu is expected to improve the production in March, Mr Sanjith said.

At the same time, they said, the turmoil in Libya has not made any impact on tea exports as no direct shipments of tea from India has been taking place for about a decade. Probably, consequent to the unrest in these countries Indian tea exports declined by 1.2 mkg in January 2011 to 15.8 mkg from 17 mkg in January 2010, he said.

However, good demand from other traditional markets coupled with strong domestic demand and a squeeze in supply due to decline in production has been keeping the prices firm. The total average price of south Indian tea during Jan to March 3 (up to 8/9 sale) stood at Rs 76.75 a kg as against Rs 74.10 in the same period in 2010.

In all-India, it was at Rs 91.94 a kg during the period in 2011 as against Rs 91.27 a kg in Jan- March 3 period in 2010, he said.

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