Tea: Black clouds on Tea export from India
August 28, 2017 at 6:26 AM ,
Rainbow Exports
Black clouds on tea export
The official target of tea export in the next three years may be up to 22 percent but tea producers and exporters are facing two major challenges. First, the traditional variety of tea is inactive in front of rising demand. Second, Kenya and Sri Lanka have destroyed India's main target markets. Industry sources said that the Tea board of India and exporters have identified seven countries or areas where exports can be increased for achieving the target. These are - Kazakhstan, Russia, America, China, Iran, Egypt and Latin America. They are jointly known as 'Crutial'. At present, the contribution of annual tea business is 53 percent with 222,500 tonnes.
India's focus is primarily focused on CTC (crush, tear, curls) variety of tea. Its estimated contribution in export volume is about 80 percent. Although there is a change in the traditional variety of tea in the global taste. After this, T-Board has asked the producers to make more choices of this type of option. The Board is also providing special subsidies for this.
Azam Monem, chairman of Indian Tea Association, a business organization of producers, says there is a need to increase this subsidy. The cost of traditional tea is quite high. To encourage tea plantation to move into traditional production, a subsidy of US$35 per mt. is required to be made at least US$350 per mt.
As an average, conventional tea production is expensive up to US$315 per mt. compared to CTC variety. A plant owner said that small producers who contribute 45 percent of the total production in the current time produce only CTC. Hence, the responsibility of traditional tea production will be on the gardens.
During the last few years, India has lost its CTC market in the hands of Kenya. On the other hand Sri Lanka, who has been trading the Ceylon Tea brand, has knocked on these markets aggressively. During 2011-2017, Kenya's tea exports rose 14 percent to 480,300 tonnes, while India's exports increased by 4 percent to 222,500 tonnes in 2016.
Where India has taken care of CTC, Sri Lanka has succeeded in maintaining its hold on traditional consumption markets despite losing 25 percent of the area compared to earlier. Most of this tea competition in Russia, Iran, Western Asia and Germany is directly with the traditional tea of Assam and Darjeeling of India. India has a strong hold in all of these.
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