Boom in high-quality tea exports seen

New Delhi, Oct 28 | Updated: Oct 29 2004, 05:37am hrs
India, the worlds largest tea producer, expects production and exports of premium quality orthodox tea to grow with fresh demand from Iran and Russia, a senior industry official said on Thursday.

The real potential for exports is in orthodox tea, Monojit Dasgupta, secretary general of a leading producers body, the Indian Tea Association (ITA), told said in an interview.

Iran has lifted its ban on tea imports and Russia is going back to orthodox, he added.

India is expected to produce around 830 million kg of tea in 2004, down from 857 million kg in the previous year because of poor climatic conditions in northern India.

Orthodox tea accounts for around 80 million kg of total production. India is likely to export around 190-195 million kg in 2004, up from 173 million kg a year ago, he said.

The breakup of orthodox and CTC exports is not available.

Exports are expected to rise as demand from Russia, a leading tea importer, is fast shifting back to orthodox tea from cheaper curl, tear and crush variety (CTC), he said. Orthodox tea, in long leaf form, is made from good quality leaves and is milder in taste but has a better aroma. CTC tea, in granule form, has a strong taste and is dark in colour. It is largely consumed in the domestic market.

Orthodox produces almost half the number of cups of tea compared with CTC and caters to a niche market.

Russia buys around 160 million kg of tea a year, of which 60% is orthodox and the rest CTC. India sells around 44 million kg of tea to Russia.

Sri Lanka, China, Indonesia, Kenya and Vietnam are among Indias major competitors in the global market. Iran, which lifted restrictions on tea imports a few months ago, mainly buys orthodox tea.

We see a demand of 40 to 50 million kg of orthodox tea every year from Iran, another ITA official said.

If planned properly, we could end up producing more orthodox tea from the northeastern region by next year, Mr Dasgupta said. We could do more exports in 2005 provided we are clear about our production strategy for orthodox tea.

The northeastern states led by Assam account for 75% to the countrys tea production and the rest comes from southern India.

Indias exports fell in 2003 from a year earlier, largely due to troubles in the vital Iraqi market after the US-led war.

Exports to Iraq plunged 71% to 12.7 million kg in 2003. Sales to Iraq are growing but it is still a risk-laden market, Mr Dasgupta said.

Reuters