Tea imports touch Rs17b

If smuggled tea is included in formal imports, Pakistan will become the largest importer in the world.

KARACHI: Pakistan has imported more than 90 million kilogrammes (kg) of tea worth Rs17.2 billion in the first eight months (July to February) of fiscal 2010-11.

Kenya was the top exporter to Pakistan, with over 55 per cent share in total imports.

With a population of 180 million, the country’s import figures represent per capita consumption of 0.5 kg, compared with Afghanistan, which imported over 68 million kg, despite a population of only 20 million, representing per capita consumption of 3.4 kg.

Black tea, one of the main types of tea imported by Afghanistan under

the Afghan Transit Trade Agreement (ATTA), is smuggled back to Pakistan and sold in local markets.

“If we include tea smuggled into Pakistan in formal imports, Pakistan will undoubtedly become the biggest importer of tea in the world,” said Pakistan Tea Association (PTA) former chairman Hamid Saeed.

Speaking on the issue of smuggling, he said the cost of smuggling had increased after crackdowns launched by the government, but that had not prevented tea worth billions of rupees being brought illegally into the country every year.

Tea, with prices ranging from $1 to $2 per kg, was now

being imported legally owing to the rise in smuggling cost.
However, tea with price tags of up to $3 per kg was still being smuggled into the country, he added.

The government has recently increased withholding tax on tea, which is likely to encourage smuggling once again through ATTA.
Additionally, tea prices will rise by Rs7 per kg after the increase in duties. Despite the efforts of the Federal Tax Ombudsman, who submitted a report on tea smuggling under ATTA, smuggling has continued unabated, said Saeed.

India has the second largest share in Pakistani imports at around 18 per cent. However, Saeed believes that India cannot be considered a reliable exporter of tea due to its high consumption. India consumes over 80 per cent of its produce every year and may choose not to export to Pakistan if the yield is lower than expected.

Kenya, on the other hand, consumes less than 10 per cent of its produce, as a result of which it could ensure uninterrupted supply to Pakistan.