Tea exporters from south are exploring opportunities to double their exports to Malaysia and Indonesia by joining hands with the tea industry in those countries. The exporters' organisation has signed an MoU with trade representatives in Malaysia to double exports and to create a brand which will cater both domestic and export markets. With Indonesian industry the exporters are exploring to see whether they can create a new blended products suitable for that country.
|LOOKING TO SOUTHEAST ASIA|
Total tea exports from south India in 2014-15 was 87.5 million kg on which around 15 per cent is exported to Malaysia and Indonesia together.
Dipak Shah, chairman, South India Tea Exporters’ Association (SITEA), who led the delegation on a four days visit to Malaysia and Indonesia last week, said that a MoU has been signed with the Tea Trade Association of Malaysia.
"We will work together to establish a strategic co-operative partnership to facilitate companies from the two countries to communicate and co-operate in the production, trade and investment of tea sector, develop commercial co-operation to increse the tea trade and to negotiate long term contract on the basis of mutual benefits, exchange of infrastructure, technology and others".
He said, "We may also look at creating a brand, which will cater both domestic and export markets," he said adding that the Malaysian industry have assured they would work towards doubling tea import from India in the next two years".
Currently, Malaysia imports around 7-8 million kilo grams of tea from India and major chunk of it goes from South India. Going forward also the Association expects tea from South will be higher due to various advantages like cost, quality and varieties.
Shah agreed that currently competing countries like Indonesia, Sri Lanka, China and others are enjoying around five per cent cost benefit due to duty. But many times this benefit gets nullified as tea prices in South India is competitive compared to competing countries.".
For instance, currently prices of South India is around Rs 90-100 a kg, while Indonesian tea is around Rs 120-130 a kg. The price in South India is almost Rs 200 per kg lower than the price in North India, which makes South India attractive for these countries.
The delegation also visited Indonesia and held discussion with the local industry.
“Our major focus (during the discussion) has been how to work together to create an exotic blend,” said Shah adding that one of the other discussion points was to create a brand and catering to international customers.
He added, the units which have EOUs in India can import tea from Indonesia and process them here and can send it back to export market. The Association has met 43 people from the tea industry in Indonesia and held discussions.
Indonesia imports between three and four million kg rom India, again major chunk of it are from South India.