Tea exports to plummet 18%

Written by Economy Bureau | Kolkata, Dec 28 | Updated: Dec 29 2007, 06:10am hrs
Faced with a bumper crop in Kenya, strong rupee and lower shipment to Iraq, tea export from India will see a fall of almost 17.8% this year. According to a status paper published recently by the Indian Tea Association, the apex body of the tea growers , exports would drop by 39 million kg.

While Indian exports was 219 million kg in 2006, it is likely to drop to 180 million kg this year. Although UAE, Iran, Afghanistan and Russia have shown marginal increase in tea imports from India, all other countries have registered lower imports.

Meanwhile, according to ITA figures, the rupee has appreciated by around 15% within a span of 12 months. Added to that was a substantial downfall in shipment to Iraq due to remittance problem.

According to Aditya Khaitan, vice-chairman of ITA, exports have been lower especially for the downturn in south India and because of less exports to Iraq. While the total production by the worlds tea majors was 1536.5 mkg, Indias share is likely to touch 940 mkg this year, 16 mkg lower when compared with the 2006 figure. The production of orthodox tea is likely to increase by 15 mkg in 2007.

According to Khaitan, the domestic consumption, likely to touch 810 mkg, is growing at 3.35%. We foresee that production will become stagnant, if not less, he said.

S Patra, joint secretary of the association, said that the prices firmed up at the beginning of 2007 owing to a fall in availability of tea.

But with the arrival of new crop and recovery of Kenyan crop, the sentiments in India have changed.

Total price realisation for the Indian tea was Rs 2,006 crore at an average of Rs 91.73 per kg in 2006 as against Rs 1,831 crore at an average of Rs 91.99 per kg in 2005. The price of orthodox tea is likely to firm up because of the rise in demand from the overseas markets.