Tea exports come down drastically By R Dutta Choudhury GUWAHATI, Feb 9 Indian tea is gradually losing its competitive edge in the international market and the volume of exports is coming down drastically, which posed another major threat to the tea industry as a whole. According to figures available, the volume of exports in 2007 came down by more than 60 million kilograms compared to 2006, which gave a clear picture of the state of affairs.
Tea industry sources told The Assam Tribune that as per the estimates, India exported only around 156.7 million kilograms of tea last year compared to 218.7 million kilograms in the previous year, recording a shortfall of 62 million kilograms. Sources said that in 2006, around 98.81 million kilograms of north Indian tea was exported and the figure came down to 84.05 last year. Similarly, around 119 million kilograms of south Indian tea was exported in 2006 and the figure came down to 72.65 million kilograms last year. With Assam producing more than 50 percent of tea produced in India, the overall decline of the volume of exports will seriously affect the tea industry in the state in the days to come.
Industry sources said that several reasons can be attributed to the decline in the volume of exports and one major reason is that the overall tea production in the world increased considerably last year, which was not the case in India as the production of Indian tea came down. Sources revealed that breaking up of the erstwhile USSR started the decline of exports as at one point of time, India used to export around 140 million kilograms of tea a year to the USSR and now Russia only imports around 60 million kilograms. Gradually the entry of Sri Lankan and Kenyan tea in the international market posed a stiff challenge to Indian tea industry.
Sources said that it is becoming gradually difficult for Indian tea to compete in the international market as the other tea producing countries can afford to sell tea at a much lower price as the cost of production in India is much higher than in all the other tea producing countries and the labour cost amounts to around 50 percent of the total cost of production. Sources pointed out that according to records available, the cost of production of tea in Kenya is around 30 percent less than in India and almost similar is the position of the other tea producing countries, which posed a serious threat to Indian tea in the international market. Moreover, because of low cost of production and other facilities offered by the Governments of those countries, the tea companies of Sri Lanka and Kenya could afford to give credit to the international buyers for more than two months, which also attracted the buyers. But most of the tea companies of India are not in a position to provide credit to the international buyers because of the ongoing slump faced by the tea industry and also because of the high cost of production. Industry sources, however, claimed that quality is not a factor in the decline of exports as the quality of Indian tea is definitely not inferior to tea produced in other countries and these days all the exporting companies take adequate care to maintain quality.
In recent times, the Government of India has started initiatives to boost the exports and sources said that the Tea Board offices in the countries like Iran and Egypt are likely to be reopened soon. India is also eyeing the market in Pakistan and if the efforts become successful, the Tea Industry in Assam would be the biggest beneficiary as traditionally the buyers of those countries like Assam CTC.
Industry sources also said that the India International Tea Convention, held in the city in November last, gave a golden opportunity to the tea companies to showcase the best of tea produced not only in Assam but also in other parts of country before the international delegates. More than 50 foreign delegates participated in the three-day convention and took active part in the tea tasting sessions and they were very happy with the quality of tea available, sources added and expressed the hope that the convention would improve exports in the days to come.
Meanwhile, the production of tea in India also came down last year as compared to 2006. According to records available, India produced 955.91 million kilograms of tea in 2006 and the figure came down to 944 million kilograms last year. Industry sources said that the weather conditions were largely responsible for the decline in tea production.
