Tea exports likely to increase despite global trade tensions

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Published: June 28, 2019 12:47:36 AM

India is the world’s second-largest producer of tea and accounts for 23-26% of the global tea production.

tea, tea exportExports to Iran is seen higher at 22.49 million kg during the four months as against 9.01 million kgs in the year-ago period.

Tea exports from the country are seen marginally ahead during the first four months of the current year and are likely to increase despite trade tensions in some importing countries.

India is the world’s second-largest producer of tea and accounts for 23-26% of the global tea production. Although India only exports nearly 20% of its tea production, exports play a vital role in maintaining the overall demand-supply balance in the domestic market.

R Sanjith, commodities head, United Planters’ Association of Southern India (Upasi), told FE that exports from India during the first four months of the current year is ahead marginally by 0.3 million kg with south India exporting 1.2 million kg more than last year for the January-April period.

“India exported 256 million kg last year which is a record and the outlook for this year looks good. Kenyan production is seen lower while south Indian tea production is also seen lower,” he added.

Exports to Iran is seen higher at 22.49 million kg during the four months as against 9.01 million kgs in the year-ago period.

Parimal Shah, President (International Operations) , MK Jokai Agri Plantations, said current tensions between the US and Iran and the US-imposed sanctions are threatening to jeopardise the trade.

“The demand of Indian tea from Iran has consistently been stable, and this trade has always held great potential. In fact, Iran has always preferred the sweetish taste of the Assam Orthodox. We are hoping for tensions to ease and for some alternate mechanism to be found out to continue trade with Iran,” he added.

On the trade with Pakistan, Shah pointed out that there has been no impact at all of the recent tension between India and Pakistan on the tea trade.

“As for Pakistan, India largely exports the CTC variety to Pakistan which is a major market for Indian tea. If trade figures are to be believed, there has been no impact at all of the recent tension between India and Pakistan on the tea trade. In fact, tea exports to Pakistan are likely to increase in 2019 as compared to last year,” he added.

India produces both the CTC and Orthodox varieties of tea. While CTC tea is exported largely to Egypt, Pakistan and the UK, the orthodox variety is exported to countries such as Iran, Saudi Arabia, Iraq, UAE, Russia, Germany, the US and Japan, among others.

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