| Date: |
29-11-2010 |
| Subject: |
ITA Sees Fall in Value-Added Tea Exports |
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Share of value added tea in India's export basket is coming down despite increase in the unit price.
Concerned over decline in export of value added tea, Indian Tea Association (ITA) has asked its members to concentrate more on value added tea exports.
According to the Tea Board's estimates the share of value added tea in the Indian export basket has dropped from 83 million kilogram in 1995 to 24 million kilogram in 2008. It has further come down to 28 million kilogram in 2009, a status paper recently released by the Association showed.
ITA's plea to its members comes at a time when Sri Lankan Tea Board is reportedly looking at increasing the share of value added tea exports to 65% from the present 41% within the next five years.
Share of value added tea in the total tea export from Sri Lanka was around 46% in 1997, which came down to 38% in 2000, 19% in 2004 and 14% in 2009.
Export of packet tea has also declined sharply from 1997 to 2009 from 89 million kilogram to 16 million kilogram in 2009 although realisation has more than doubled during the time. While export of instant tea has almost remained at the same level, tea bags export have increased to 9.17 million kilogram in 2009 from 2.13 million kilogram in 1997.
On the other hand price of value added tea has gradually improved from Rs 94.27 per kg in 1997 to Rs 110.26 per kg, Rs 210.81 per kg and Rs 237.03 per kg. Meanwhile, total tea export during 2010 is likely to be 190 million kilograms as against 196 million kilograms in 2009 and 219 million kilograms in 2006.
Last year tea export to countries like Russia, Iraq and Afghanistan increased in last year, it actually declined in case of countries like UK, Germany, UAE and Iran.
Exports to countries like Russia, Germany, Ireland and Australia were down during the first three months of 2010.
According to Aditya Khaitan, chairman of Indian Tea Association (ITA), Indian tea looses its competitiveness against countries like Kenya and Sri Lanka primarily due to higher cost of production.
Almost 74% of the tea industry in India comprises of large producers with high cost structure as against well organised low cost, high quality small holders in Kenya and Sri Lanka.
Further, production in North India which accounts for the 75% of the total crop is not all year round. "The Indian industry is primarily dependent on weatherclimate change and erratic rainfall patterns pose a challenge for maintaining consistency in quality," Khaitan said.
Indian tea producers have asked the government for policy interventions to protect market shares in countries like UK, Germany and Ireland while expanding market base to other export destinations.
Source : news.in.msn.com
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