Kenyan turmoil likely to boost tea exports

KOLKATA: The recent political turmoil in Kenya may augur well for the Indian tea industry. The tea production in Kenya has been hard hit due to this strife and Indian tea industry is expecting that the new season will open on a strong note as countries like Egypt and Pakistan, which entirely depends on Kenyan tea, will have to lift tea from India for their domestic consumption.

Aditya Khaitan, chairman of Indian Tea Association (ITA) told ET, “The political problem in Kenya has affected the tea production there. We have learnt that the tea garden workers have fled from gardens. The weather pattern in Kenya has also become dry, which is not favourable for tea. Due to all these, the tea production in Kenya is expected to be affected and will create a global shortage.”

Incidentally, Kenya produces 350 million kg to 375 million kg of tea annually. Mr Khaitan added, “Assam tea industry will gain maximum from the prevailing situation in Kenya. Qualitywise, the CTC tea from Assam is at par with good quality Kenyan tea. Egypt and Pakistan, which solely depend on Kenya to meet their internal demand for tea, will now have to look to India. Even the UK also imports quite a significant volume of tea from Kenya.”

Egypt consumes 100 million kg of tea annually while Pakistan consumes 130 million kg of tea annually. In this situation, the ITA chief feels that the new season, which begins in March, will open on a strong note.

“The industry does not have any carry forward stock in the current year. The domestic consumption is growing at a rate of 3.5%. All these put together will help Indian tea industry to start on a firm note this year,” said Mr Khaitan, who is also the managing director McLeod Russel India Limited (MRIL).

The tea industry feels that the shortfall in Kenyan production, will also have direct effect on Indian tea exports. “In 2007, India exported 180 million kg of tea. We feel that India can export another 20 million kg more in 2008 if the tea situation in Kenya does not improve in the coming months,“ said a senior Tea Board official.