Iraq to buy 100mn kg of tea

Iraq will be picking up more than 100 million kg of tea from the Indian market, this year, said Khalil Assi Kadhim, director general, State Company for Foodstuff Trading of the ministry of trade, government of Iraq.

Kadhim said, Iraq's requirement per month was around 17 million kg, out of which nine million kg would be sourced from India.

Industry sources said, this would have a very positive impact of the Indian tea market, which started the season on a clean slate. The industry was almost certain that domestic consumption picked up last year as there was no carryforward.

Moreover, this year, the crop was down. If domestic consumption picked up, crop production was down and exports looked up, then the industry was headed for a good year as the availability would be low.

This was likely to have a positive impact on prices and the industry could just manage to come out of recession.

It may be mentioned, the poor export performance of Indian tea industry last year was mainly due to the absence of Iraq as an export destination. In the year before last, Iraq had picked up more than 40 million kg from India.

To kickstart the process, Khadim had already signed a memorandum of understanding (MoU) with Limtex.

Limtex would be supplying Iraq around 50 million kg of tea, over the next one year.

According to the terms of the MoU, the two parties would enter into a joint venture and Limtex would also rehabilitate the tea factory under the ministry and Iraq, which would be used as a packaging centre.

Gopal Poddar, chairman Limtex said that his gardens produced around 10 million kg and the balance would be purchased through auctions and private sales.

Limtex had tea gardens in upper Assam and Dooars with several manufacturing units.

The trade ministry's visit was aimed at studying the Indian tea industry, exploring the possibility to source its tea requirements for future on a regular and reliable basis.

The other members of the delegation were Rajab A Hussein, director ministry of foreign affairs, Mahdi Salh Habib, director, Nidda Mansoor Artin, tea factory manager and Ali Madhloom Maki, director.