Exports dip on poor Pakistan, Iraq demand

KOCHI : Indian tea export is yet to pick up momentum in the absence of strong buying from Iraq and Pakistan. The tea exports from India had declined by 62 million kg in 2007 with poor buying from these countries. The only silver lining is the export enquiries from Egypt and Kenya, according to exporters. However, it remains to be seen how long the trend lasts. As per the figures of the Tea Board, tea exports for 2007 stood at 156.7 million kg compared with 218.7 million kg in 2006.

The fall was more severe for South Indian tea export which went down by over 47 million kg compared with 14 million kg slump in the North Indian tea export. The payment problems and quality issues led Indian exporters to shun Iraq market. Iraq had purchased 40 million kg in 2006, becoming the largest purchaser of Indian tea. The offtake by Pakistan also declined from the level of 16 million kg in 2006 with the crop in Kenya, its traditional tea buying market, improving.

Russian buying of orthodox tea is going strong. The recent issue of ban on plant products from India due to detection of pests has been sorted out. ���Russia is insisting on several conditions like good packing and fumigation before exporting,��� says an exporter Krishnakumar Shah.

There has been an increase in the export enquiries from Egypt with the reduction of import duty on Indian tea. The civil strife in Kenya seems to have affected the tea plantation. ���There have been export enquiries from Mombasa as well,��� Shah says.

The export can be improved with increase in the production of Orthodox tea, which goes to Russia mostly. ���Only if the entire production of manufacturers comes for the auction this can be done. It is the method in Sri Lanka,��� points out Sachin Dholakia of Siewart and Dholakia, a prominent tea exporter. The Indian tea production for 2007 is down by 11 million kg to 944 million kg.

While North Indian production fell by 5 million kg, in the case of South India, the slump was about 7 million kg. The closure of estates and prolonged rains led to decreased tea production in Kerala in 2007.