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Kenyan failure boost Indian exports

India's $1.5 billion tea industry was facing a crisis earlier, with prices dropping in the weekly auctions since 1998.

india Updated: May 06, 2006 16:35 IST

Indian tea exports are expected to jump this year with a severe drought hitting Kenyan crops, an official with the Indian Tea Association (ITA) said on Saturday.

"A massive crop failure in Kenya due to the effects of drought has led to a gap of about 30 million kg of tea in the world market. India is expected to fill this shortfall and hence we are doing some aggressive marketing," said Dhiraj Kakati, secretary of the Assam chapter of ITA, the country's apex tea administration body.

Kakati added that Pakistan, Iran, Iraq, and Russia have been showing interest to lift sizeable volume of Indian tea. "We have been getting positive feelers from these countries," he said. "Our tea exports would definitely increase."

A Pakistani tea trader's delegation visited India last month and showed interest in promoting a new blend of tea, grown in India's northeastern state of Assam.

Pakistan imports about 80 per cent of the country's total domestic consumption of about 140 million kg of tea - a bulk of the imports coming from Kenya.

"An Indian tea delegation is expected to visit Pakistan either this month or early next month to strike a deal," the official informed.

India produced a record high of 928 million kg of tea last year compared to 820 million kg in 2004. India is the world's largest tea producer followed by China.

The northeastern state of Assam is considered the heart of India's tea industry, with the state accounting for about 55 percent of the country's total annual tea production.

In 2005, India exported 180 million kg of tea. "The drop in Kenyan tea production apart, overseas buyers are showing interest in Indian tea, as we have been producing very high quality beverage," Kakati said.

India's $1.5 billion tea industry was facing a crisis earlier, with prices dropping in the weekly auctions since 1998. But, of late, prices are beginning to firm up.

A kilogram of good quality Assam tea sold at Rs 70 in the auctions last week. Last year, the average price in the auctions was Rs 62 a kg. Prior to 1998, good quality Assam tea sold at about Rs 90 a kg.

The slump in prices and exports has largely been attributed to cheap and inferior quality teas produced by many new tea-growing countries, thereby resulting in premium quality Indian teas facing stiffer competition in the global market.

"The Indian tea industry is on a revival trend now and all indicators are very positive so far, and hence, our stress and focus is on producing high quality tea," said A Sharma, a senior planter in Assam.

First Published: May 06, 2006 11:08 IST