India tea exports rise, prices firm up at auctions

September 29th, 2008 - 5:39 pm ICT by IANS  

Guwahati, Sep 29 (IANS) The beleaguered Indian tea industry is on a comeback trail with exports increasing and prices firming up in the weekly auctions despite competition from several countries producing cheap teas, an industry official said here Monday. “Exports rose by about 16 million kilograms to 105.57 million kilograms from January to July this year, compared to the corresponding period the previous year and this is surely a very healthy trend,” said Dhiraj Kakaty, secretary of the Assam chapter of the Indian Tea Association (ITA), an organisation of major tea growers.

India is the world’s largest tea producer after China and produced a record crop of 955 million kilograms last year with the northeastern state of Assam accounting for 55 percent of the total output.

“We are fetching good average prices in the weekly auctions with a kilogram of tea sold at Rs.83, which is about Rs.14 higher than what we got last year in the same period between January and July,” Kakaty told IANS.

“The overall mood is vibrant with the Indian tea industry now beginning to look up. Overseas demand is on the increase and prices are also firming up mainly due to very good quality teas produced by us, besides shortage of teas in the world market,” he said.

Pakistan, Egypt, Iran and Iraq and countries in the Middle East figured prominently in the export list.

Besides these countries, Kenya itself has been buying from the country to meet its export obligations, while Pakistan has also begun to buy some quantities to meet the shortage arising out of Kenyan production troubles.

India’s $1.5-billion tea industry has been in a slump since 1998, with prices and exports plummeting because of weak domestic demand and increased international competition, coupled with poor quality teas produced in the country.

Last year, India exported 200 million kilograms of tea. “The markets are expected to remain strong, both in terms of exports and prices.”

Tea production in the current fiscal has been pegged at 960 million kilograms to 970 million kilograms compared to 955 million kilograms produced in 2007.

“Production has also shown an increase 16.5 million kilograms compared to the corresponding period from January to July last year,” Kakaty said. The slump in prices and exports is largely attributed to cheap and inferior quality teas produced by many new tea-growing countries like Vietnam, Bangladesh and Iran.

This has meant premium quality Indian teas are facing stiffer competition in the global market. “But on the whole the mood of the industry is very positive and vibrant,” Kakaty said.

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