Indian tea import rises as Kenyan output drops

Strengthening dollar against rupee gives neighbour edge over rival.

Express December 26, 2011

Pakistan’s dependence on Indian tea is gradually increasing as it imported 20 million kg of CTC teas from India, which is one of the highest in recent years, according to The Economic Times.

A drop in Kenyan production has also helped India to strengthen its position. A trade delegation from Pakistan Tea Association will be visiting India in April during which long-term business deals are expected to be clinched.

Pakistan is largely a market for the CTC variety and said to be the second largest importer after Russia. The country’s total official tea import volume is around 120 million kg. But tea industry officials say that a high import duty results in additional tea making its way into the country through grey channels. Almost 65% to 70% of its total official tea import comes from Kenya, while India accounts for 15%. But with Kenyan production down by almost 9% to 259.8 million kg, India has an edge this year.

With Iran stopping its purchases from India due to a payment problem, Indian tea producers are banking on Pakistan as one of the emerging export markets in the coming years.

“Pakistan has been a good buyer so far from south India and is even buying from north India as well. The strengthening of the dollar against the rupee has also made Indian tea competitive in the Pakistani market,” said McLeod Russel India director Azam Monem.

“Kenyan prices are higher compared with India and its production has been down. This could be an advantage for us,” Monem added.

“Per capita consumption of tea has reached one kilogrammes per annum and is expected to go up further,” said CS Bedi, chairman of Indian Tea Association. “We have been trying to develop business relationship with Pakistan over quite sometime now. Political tensions between the two countries have not marred our effort and over the years exports has been increasing to Pakistan,” Bedi said.

India is now offering Pakistan a wide array of tea blends at different price points. “Earlier, Pakistani tea traders used to complain about high prices of Indian tea. But now they understand that India offers quality teas which are at par with Kenyan tea or even sometimes even better,” said Bedi.

Published in The Express Tribune, December 27th, 2011.


Malik | 11 years ago | Reply

@Numb Indian: They say "business is business and Cup of tea is cup of tea".

Numb Indian | 11 years ago | Reply

People become friends over a cup of tea....wish we could also be.

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