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Shyama Rajagopal
Sept 20: Tea exports are not likely to meet the target of 210 million kg this year, according to Forbes Ewart & Figgis, leading tea traders in Kochi. Till the end of June, only 96 million kg was exported. A similar figure for the next six months would be a great achievement considering the rouble crisis in Russia, who imports a major share of the orthodox variety.
Though tea exports to other countries including West Asia and certain East European nations remain unaffected, the turmoil in Russia will be a deciding factor regarding tea exports.
Exports to Russia had increased over 70 per cent in 1997 compared with the previous year. Of the over 200 million kg exported in 1997, 94 million kg had gone to Russia alone. There was an increase in exports to Russia in April, May and June this year but there has been a steady decline of orders since the rouble crashed.
Moreover, the Kenyan tea, which has the competitive edge over Indian tea, is back. Sri Lanka is also having a good crop. Among the competitors,only Indonesia is lagging behind with floods and political unrest.
There was an increase in the export of branded tea in 1997 over the previous years. Out of the Rs 1,730 crore earned from export of 203 million kg of tea, Rs 750 crore came from the branded tea form. According to WC Thomas of Forbes, there is a preference for packaged tea in the global market. Quality and instant delivery are supposed to be making the branded packaged tea more popular, he said.
Russian crisis has affected the auction prices too. Thomas said the prices have come down at an average of Rs 10-20 a kg in the spread of three weeks.
There is a setback in the internal demand too because of which the prices are coming down for the dust tea - the preferred tea in Kerala. "We expect the auction prices to stabilise soon," he said.
The eight per cent excise on packaged tea is likely to be one reason for the decrease in consumption, said Thomas. Even loose tea is be sold at a higher price, he said.
The average prices during thelast three auctions (sale 34, 35 and 36) for the exportable leaf variety were Rs 76.76 per kg, Rs 73.46 per kg and Rs 72.26 per kg respectively. In the dust tea the prices averaged (for sale 34, 35, 36) Rs 73.28, Rs 70.73 and Rs 69.69 a kg. According to Thomas, the prices would come down for another three auctions before they stabilise.
The crop has been good so far and the industry is expecting a good crop in August-September too. Too much rain in the beginning of September is likely to even out the October-November crop.
The crop output till end of July was 41.7 million kg higher than last year. All India tea production was 417 million kg till end July 1998 compared with 375 million kg in comparable period in 1997. Of this, the North Indian share was 302 million kg in 1998 against 262 million kg in 1997 -- about 40 million kg higher than last year. The South Indian tea output was only marginally higher in 1998 at 115 million kg against 113 million kg in 1997.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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