Tea exports from India to Pakistan fall amid rising tensions.

CHENNAI: As the tension between India and Pakistan has gone up, exports of tea from India to the neighbouring country have witnessed a fall. Tea exports to Pakistan fell 36% to 7.46 million kg for the period January-August 2016.

Tensions between the two nations have risen after India's recent surgical strike on terror camps in Pakistan Occupied Kashmir.

While there has been a slow trickle of tea shipments, the tea route to Pakistan is currently via Dubai. "Tea is not being shipped through Wagah border. Merchant exporters have started shipping tea to Dubai wholesale merchants. From there, tea is being shipped to Pakistan, enormously increasing costs at the retail consumer end," said a member of the Tea Board of India.

Pakistan has reportedly stepped up tea purchases in Kenya and Sri Lanka. "While our teas roughly sell between Rs 110 - Rs 95 per kg, Kenyan teas are priced 30% cheaper. Foreign buyers are not allowed to directly participate in our e-auctions, so merchants have to bid on their behalf," said the official.

"Our teas are rich in flavour and colouring with beautiful reddish-copper tones. So while Pakistan buys cheap teas from Kenya, the corporate and smaller tea retailers there blend/mix our teas for improving the tone and quality of the tea," said the official.

For the period from January-August 2016, total tea exports from India rose 0.87% to 135.57 million kg from the year-ago period. On an annual basis, tea exports from India are expected to be around 220 million kg, flat or slightly up from 2015 exports.

"Exports across sectors have been falling in the last 18 months, but tea exports have generally remained insulated. We continue to export to Russia, Poland, England, Egypt and even China. China, which produces a lot of green tea, is now purchasing black tea from India as the base for specialty teas," said the official.

Tea exports to China grew 60% to 3.13 million kg in January-August 2016 from 1.95 million kg for the same period last year.

"There has been a particular interest from retailers in provinces like Szechuan, Fujian, Guangdong and Yunnan. The capital city Beijing has also seen growing demand for Indian black tea from Darjeeling. Tea houses like the rich red colour of black tea, which is much darker than the unfermented white and green teas that are generally sold loose in China. Loose tea leaves are seeing more demand than tea powder," said the official.

Exports to China remain untouched by political developments unlike those to Pakistan, where tea exports have been hit because of rising tensions and the political situation.

Source : timesofindia.indiatimes.com