Tea traders body sees exports falling below 175 m kg in 2001

Our Economic Bureau

New Delhi, Nov 4: India's tea export is likely to fall below 175 million kg in the current year, according to the recent estimate of the Federation of All India Tea Traders’ Associations (FAITTA).

The decline in exports is primarily due to the poor quality of tea produced. With the fall in exports, the industry and traders are finding difficult to dispose the huge accumulated stock. With a view to bail out the industry, FAITTA has appealed to the empowered committee of state finance ministers to reduce the agreed floor rate of sales tax on tea from 8 per cent to two per cent and that the tea should be declared as an essential commodity.

Addressing a joint press conference here, the vice-chairman, FAITTA, Anil Jain and chairman of Western India Tea Dealers’ Association (WITDA) Piyush O Desai said that the Tea Board has projected that Indian tea export in the current year will be 180 to 185 million kg instead of the target of 120 million kg. Comparatively FAITTA had fixed an export target of 210 million kg but we are now disappointed and expect the exports to fall below 175 kg. They expressed fears that the FAO study may turn true in the longer run. FAO has estimated that India’s tea export may fall to 150 to 160 million kg by the period 2005-10.

They stated that Indian tea is no longer competitive in the world market as compared to that from China and Sri Lanka. The quality problem with Indian tea coupled with some foreign exchange problems are the causes for the decline in our traditional market share in Middle East countries. The latest development of on-going US military action in Afganistan has made matters worse and the exports to Sudan, Egypt, Saudi Arabia, Iran, Iraq and Afganistan has become difficult.

Only best quality of tea are being exported. Majority of tea which are of inferior quality are finding problems of being exported as in these products there is hardly any value-addition and most of what is being exported are in bulk form.