Tea exports decline 29 per cent in FY08: Icra
The tea exports of India have declined by a whopping 29 per cent in 2007-08, triggered by the collapse of major global markets such as Iraq and a rise in production in countries like Kenya and Turkey, a study said.
“During FY08, exports declined 28.7 per cent in volumes, 25.2 per cent in rupee terms and 16 per cent in dollar terms,” the study by rating agency Icra said.
The country’s tea exports slumped to 155.59 million kg in FY08 from 218.15 million kg in FY07, while in value terms it declined to Rs 1,530 crore in FY08, compared with Rs 2,045 crore in the same period previous year, the study added.
Despite producing 25 per cent of the world’s tea, the country has lost ground in virtually every export market, accounting for only 10 per cent of the global tea exports.
“India’s international competitiveness in tea exports has been on a decline, with its share of world exports declining from 19 per cent in 1990,” the study pointed out.
In the early 1980s, India’s tea exports accounted for 40 per cent of the domestic production, which subsequently declined to 20 per cent in 1994. Though the proportion of exports surged to around 24 per cent of domestic output in 2003, it again fell to 17 per cent in 2007. The country’s exports, in volumes, have declined at a compounded annual growth rate of 2.6 per cent between 1998-2007 period.
The exports declined by 28.4 per cent to 156.7 million kg in 2007, prompted by a switchover of major buying countries like the UK and Pakistan from India to their preferred supplier nation — Kenya.
Moreover, the report says India’s tea export price realisation has also declined from Rs 108 per kg in 1998-99 to Rs 106 during 2006-07. A sharp decline in realisations at Kolkata and world auctions during January-March 2007 coupled with rupee appreciation dented the prospects in the last fiscal, it points out.
India’s tea exports have primarily been dominated by loose BT tea, a widely used variety, which accounts for 72 per cent of exports in volume terms and 67 per cent in value terms. However, in spite of an increase in the share of packet and GT tea, the share of BT tea has fallen due to a decline in exports to Russia, which was the largest market for India’s tea exports till 2003-04, the report said.