Rising rupee turns heat on tea exports

COIMBATORE: As the rupee strengthens against the dollar, tea producers and exporters in the Nilgiris district have stated feeling the heat.

Tea exports this year are likely to be around last year’s level, but the second half could witness fluctuations in view of the rupee gaining against the dollar.

Some of the exporters have also suffered losses as a result. For this year, an export target of 210 million kg (mkg) has been set against last year’s export of 203 mkg.

According to data available with the United Planters’ Association of South India (Upasi), South Indian exports for the period between January and May stood at 32.2 mkg against 39.7 mkg for the same period a year ago.

Plantation sources said the exports during the first half of 2007 was mostly based on contracts that were signed last year, when the rupee was ruling at over 43 to the dollar. Currently, the rupee is ruling at around 40.5 and hence exporters are not keen on signing new contracts.

Industry sources feel that besides rupee appreciation, global recovery in production, especially in Kenya, has led to a dip in tea exports this year.

“The Kenyan market is back in the black and hence the importers are slowly pulling back from buying,” they said.