You are here: Home » Economy & Policy » News
Business Standard

Tea exports surge 4.57% in January-July 2017

Exporters said there has been three primary unique trends in the export market this year

Avishek Rakshit  |  Kolkata 

Darjeeling tea workers may get equity stake in gardens

Despite India's staple tea importers like Russia, UK, Germany and others stagnating their purchases this year, from India, during the January- July period grew by 4.57 per cent, thanks to increased purchases from Kazakhstan, Iran, U.A.E., Egypt and others.

Although unit prices, both in terms of the and remained almost flat, increased sales volume at 121.13 million kg (mkg) during this period, led to an upturn of 7.16 per cent in total forex earnings at $ 360.65 million.

Exporters said there has been three primary unique trends in the export market this year. In the first place, the average selling prices of Darjeeling tea, available in extremely limited quantity, have risen by 50-100 per cent both in auction as well as private sales which resulted in better average price realisation.

Secondly, the market has become extremely strong and average prices of this category surged by over 12 per cent this year. This tea variant's contribution to the total sales volume, so far, comprised about 40 per cent this year.

"It is a visible fact now that demand as well as the price has risen momentously and is poised to rise further in the coming days", Sugato Dutta, who is a director at tea export firm, Subodh Brothers, told Business Standard.

Thus, exports surged to major markets like Iran (7.01 per cent at 12.52 mkg), Egypt (98.23 per cent at 4.48 mkg), U.A.E. (35.09 per cent at 10.01 mkg), China (71.02 per cent at 4.19 per cent), Sri Lanka (150 per cent at 2.50 mkg) and others.

In the third place, demand for lower grade CTC (crush, tear, curl) leaves, which takes up for 45 per cent of the total CTC exports, has risen considerably which led to higher sales volume, particularly in developing economies.


Tea exports surge 4.57% in January-July 2017

Micro-small scale blenders of Orthodox tea, who comprise 15 per cent of the total export market, have been cutting down on usage and substituting the same by CTC. Although the blend is changed as a result of this, the replacement doesn't change the brewed flavour and colour of the tea.

Dutta said one of his clients, who used to mix 15 per cent CTC with Orthodox leaves, has asked Dutta to ship him a blend comprising lower percentage of Orthodox leaves and higher CTC leaves keeping the price same.

"Not many can afford a pure Orthodox blend. As a result while a section of countries like Egypt, Iran, U.A.E., Ukraine, Kazakhstan and others are increasing their quality uptake, other countries are trimming it down", he reasoned.

During January-July, exports to Russia stagnated at 26.41 mkg while it fell by 17 per cent in UK at 5.32 mkg. Germany, the primary Darjeeling tea buyer and a major blending market, also bought nine per cent lesser volume at 4.93 mkg during this period.

Azam Monem, chairman at the Indian Tea Association (ITA), is of the view that a 50 mkg crop loss in Kenya had boosted international CTC prices of both Assam and Niligiri leaves. Dearth of Kenyan leaves resulted in the blenders falling back on Indian CTC which boosted volume. However, like Dutta, he too believes that the way forward for the industry is by focussing on increasing exports of

"This tea variant is not only fetches higher prices in the export market, but the demand for this kind of tea is on the rise. However, it will not mean the industry losing focus on CTC; in fact better quality yield needs to be produced", he told this newspaper adding that the Tea Board of India needs to extend the and export subsidies to encourage producers.

The Tea Board of India as well estate producers and exporters have targeted seven countries or regions which will be contributing the bulk of exports and forex in the days ahead. Namely Kazakhstan, Russia, USA, China, Iran, Egypt and the Latin American region - termed as KRUCIEL, which currently account for over 53 per cent of the annual tea trade pegged at 222.45 mkg, have been identified.

Additionally, ITA has also targeted Iraq and Pakistan to up exports.

First Published: Wed, September 27 2017. 01:15 IST