India’s tea exports to Afghanistan dwindling for a year

PS Sundar Coonoor | Updated on September 01, 2021

Shipments can only happen when parameters turn favourable

The Afghanistan crisis has not caused much of a direct impact to India’s tea exports because the shipments to that country had already been dwindling for over a year now. The good political relationship between India and Afghanistan in the recent years had helped that country to import tea from India but the emergence of Iran and the UAE as strong importers next to the CIS and the USA had reduced the availability of tea to Afghanistan.

Falling Afghanistan exports

However, India’s import of dry fruits from Afghanistan helped some reciprocal purchase of Indian tea. According to the latest data available with Tea Board, during the fiscal 2020-21, India’s shipment of tea to Afghanistan fell to 0.10 million kg (mkg) from 0.21 mkg in the previous fiscal.

The volume shipped declined also because of a sharp increase in the average price to ₹135 a kg from ₹110 in the previous fiscal. “We did not raise the asking price, but the general increase in the world market and the concomitant exchange fluctuations caused the hike. Every kilogram exported to Afghanistan cost $1.90 last fiscal compared to $1.48 during 2019-20”, an exporter told BusinessLine.

Low earnings

With reduced volume, the overall earnings from tea shipments to Afghanistan dropped to ₹1.35 crore from ₹2.31 crore in the previous fiscal. In dollar terms, the earnings fell to $ 0.19 million from $0.31 million.

The falling trend continues in the current fiscal. In the first two months, the latest period for which official data is available with Tea Board, shipments to Afghanistan dropped to 0.76 mkg from 2.17 mkg. While the average price has increased to ₹146.97 a kg from ₹123.89, the overall earnings from tea shipments to Afghanistan have crashed to ₹11.17 crore from ₹26.84 crore.

In dollar terms, the average price rose to $1.97 a kg from $1.75 and the earnings crashed to $1.50 million from $3.79 million. Presently, exporters are not buying for Afghanistan market.

“Neither by volume nor by value, will India lose anything worth worrying if shipments to Afghanistan come to a halt because of the ongoing crisis there, but we understand that the government is concerned to help the needy there. Tea shipments can happen only when trading parameters including transit and payment turn favourable. So, it is a ‘wait-and-watch’ period now for us towards Afghanistan,” the exporter wanting to be anonymous said.

Published on August 31, 2021

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