Exim Bank to fund branding of Indian organic tea

September 17th, 2009 - 3:29 pm ICT by IANS  

By Fakir Balaji
Coonoor (Tamil Nadu), Sep 17 (IANS) State-run Export-Import (Exim) Bank will finance planters up to 50 percent for branding Indian organic tea in overseas markets, a top bank official said here.

“We will lend planters by way of grant up to 50 percent to promote organic teas as Indian brands in international markets by getting geographical indication (GI) certification,” Exim Bank chairman and managing director T.C. Venkat Subramanian told IANS in an interview.

A GI certification represents a specific geographical location for products with certain qualities that are unique to the place of their origin.

According to the Food and Agriculture Organisation (FAO), the global organic food market grew by 11 percent in 2007 with a value of $44 billion and is projected to touch $67 billion by 2012.

“Now that the tea plantation sector has come out of a prolonged cyclical downturn, Indian planters should aggressively grow organic teas to avoid using agro-chemicals in their estates and lower production costs,” Subramanian said.

The Tea Board has obtained a fair trade and GI certification for Choice Organic Darjeeling Tea in 2004 to protect its unique quality and flavour from being replicated elsewhere.

Darjeeling Tea is grown in the Himalayan foothills of North Bengal. Its logo is also protected as a trade mark with IPR (intellectual property rights).

The Kolkata-based Tea Board had also registered trade mark (logo) in 2004 “Nilgiri” for specialty teas grown in the southern Western Ghats of Tamil Nadu and “Assam” for teas grown in the hill gardens of the northeastern state.

“Similarly, the Temi organic tea, grown in Sikkim, is a popular brand in Europe, especially Germany. The estate has applied for GI certification to protect its identity and herbal quality unique to the region,” Subramanian said.

The estate, located in Temi in south Sikkim, grows about 100 tonnes of organic tea on about 440 acres. As a premium and niche product, Temi tea fetches Rs.2,500 (about $50) per kilogram in the international market.

“With European and other advanced countries being more health conscious, demand for natural and organic food is in great demand. In soft beverages, Indian planters should take advantage of the potential for organic tea and coffee in matured export markets,” Subramanian said.

The bank has also come forward to help the plantation sector in obtaining Fairtrade certification to penetrate the US and Canadian markets with specialty tea and coffee.

Designed to allow people to identify products that meet agreed environmental, labour and developmental standards, the Fairtrade certification will enable Indian brands to create niche markets in Europe and the US where consumption of specialty products is high.

FAO estimates that the global market for Fairtrade to be about $9 billion by 2012 as against $3.2 billion in 2007, which is an increase of 47 percent over 2006.

“The Indian planters should focus on key markets, with a customised approach for differentiated markets. The export of tea can be selectively promoted in the identified markets where advantages for brand building are greater,” Subramanian added.

(Fakir Balaji can be contacted at fakir.b@ians.in)

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