Tough year ahead for tea export

Still reeling from a bad year of exports, the Indian tea industry is set to face another challenging year. The Tea Board's data for April-January, 2014-15, shows a record decline of 27.4 million kg from the corresponding level of the previous year to 158.6 mn kg. In January, exports stood at 16 mn kg, compared to 19.7 mn kg. In value terms, it was at Rs 3,114 crore compared to Rs 3,769 crore. The average export price also came down to Rs 196 a kg, from Rs 202 a kg.

"There are a number of factors affecting exports. This year will also be challenging, with the Foreign Trade Policy 2015-2020 pulling out incentives," Indian Tea Association Vice-Chairman, Azam Monem, said.

Tea had been earlier included in the Vishesh Krishi Gram Udyog Yojana and enjoyed a five per cent benefit across bulk and value-added teas. Under the Merchandise Exports from India Scheme, the benefit stands reduced from five per cent to three per cent on bulk teas, expected to adversely impact the competitiveness of Indian tea in global markets. Bulk tea accounts for around 90 per cent of total exports.

The Indian Tea Association, which represents most of the Indian growers, had in fact, suggested the benefit be enhanced to seven per cent in the face of increasing competition from global producers.

"Sri Lanka and Kenya have seen successive bumper crops and their teas are cheaper by more than a dollar. Moreover, these countries are focused on exports and the government is offering a lot incentives," Monem explained.