High prices may spoil Indian tea party
Indian tea industry may miss the export target of 200m kg in ’06. The trend in the first six month shows that exports is trailing behind the ’05 figures by at least 9m kg.
By Sutanuka Ghosal, TNN |
KOLKATA: Indian tea industry may miss the export target of 200m kg in ’06. The trend in the first six month shows that exports is trailing behind the ’05 figures by at least 9m kg.
PK Sen, chairman of Caritt Moran & Co, a major tea auctioneer, told ET: “Initially, in the backdrop of Kenyan drought, we had thought that Indian exports will witness a quantum jump in ‘06. But that has not happened in reality.” Figures released by Indian Tea Association also corroborate the industry’s view.
ITA figures show that in the first five months (January-May) of this year, tea exports has plummeted to 59.4m kg as against 68.6m kg in the corresponding period of the previous year. In the first five months, tea exports is down by 9.1m and the industry experts say that the trend is still continuing.
Price-wise too, the industry has not been able to gain much. The average price realisation of tea in the first five months is Rs 84.5 per kg as against Rs 94 per kg in the corresponding period of the previous year. Mr Sen said: “There has been a lot of movement in the lower end of the market. Pakistan, in particular, has picked up quite a good volume of tea from the south. But the export activity in the quality tea segment is not significant. The buyers are not keen to pay more quality teas.”
The high price of Indian tea is a major stumbling block for the tea exporters. For example, the price of good quality Assam orthodox is at least Rs 10 more per kg than similar quality of Kenyan or Sri Lankan tea. “We cannot control our price as our cost of production is very high. Unless this issue is addressed properly, India will not be able to export higher volumes of tea in the coming years,” said KS David, MD, Goodricke Group.
India’s efforts to regain markets in Russia has become a cropper. Even after repeated visits and promotional campaigns, India has not been able to make much headway into the Russian and CIS (Commonwealth of Independent Countries) nations.
“We are now focusing on emerging markets like Iran, Egypt and others to increase our exports. Pakistan, too, is our focus country,” said Basudeb Banerjee, chairman, Tea Board.
Meanwhile, the commerce ministry’s move to trade all teas produced in the country using the e-auction platform may turn out to be unsuccessful.
The industry feels that unless there is some incentive, the producers will not sell their entire production through the e-auction route.
PK Sen, chairman of Caritt Moran & Co, a major tea auctioneer, told ET: “Initially, in the backdrop of Kenyan drought, we had thought that Indian exports will witness a quantum jump in ‘06. But that has not happened in reality.” Figures released by Indian Tea Association also corroborate the industry’s view.
ITA figures show that in the first five months (January-May) of this year, tea exports has plummeted to 59.4m kg as against 68.6m kg in the corresponding period of the previous year. In the first five months, tea exports is down by 9.1m and the industry experts say that the trend is still continuing.
Price-wise too, the industry has not been able to gain much. The average price realisation of tea in the first five months is Rs 84.5 per kg as against Rs 94 per kg in the corresponding period of the previous year. Mr Sen said: “There has been a lot of movement in the lower end of the market. Pakistan, in particular, has picked up quite a good volume of tea from the south. But the export activity in the quality tea segment is not significant. The buyers are not keen to pay more quality teas.”
The high price of Indian tea is a major stumbling block for the tea exporters. For example, the price of good quality Assam orthodox is at least Rs 10 more per kg than similar quality of Kenyan or Sri Lankan tea. “We cannot control our price as our cost of production is very high. Unless this issue is addressed properly, India will not be able to export higher volumes of tea in the coming years,” said KS David, MD, Goodricke Group.
India’s efforts to regain markets in Russia has become a cropper. Even after repeated visits and promotional campaigns, India has not been able to make much headway into the Russian and CIS (Commonwealth of Independent Countries) nations.
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“We are now focusing on emerging markets like Iran, Egypt and others to increase our exports. Pakistan, too, is our focus country,” said Basudeb Banerjee, chairman, Tea Board.
Meanwhile, the commerce ministry’s move to trade all teas produced in the country using the e-auction platform may turn out to be unsuccessful.
The industry feels that unless there is some incentive, the producers will not sell their entire production through the e-auction route.
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