November 4: The tea industry is poised for a major breakthrough in exports to the Pakistan market -- so long untapped for political reasons -- having already shipped one million kgs of tea. The Indian tea companies are looking forward to the visit of a high-powered seven-member delegation from Pakistan shortly.

The delegation comprising big players like Unilever, Ispahani and Tapal, are slated to meet top industry officials on November 16. Its three-day visit would include meetings with industry officials, visits to a few gardens as well as acquainting themselves with the auction houses.

Top industry sources said Indian companies are upbeat on the Pak visit as it is expected to go a long way to enhance trade ties between the two neighbouring countries.

Pakistan, which has a 140 million kg market, imports about 70 per cent of its requirement from Kenya with the rest being imported from Sri Lanka, Indonesia and a few African countries.

According to a top industry official, Pakistan is studying the Indian market especially due to a substantial drop in the Kenyan production. "It would be ideal to clinch a substantial portion of the 140 million kg market.

Moreover, trading would be easier keeping in mind similar consumption habits as well as preferences," said the source.

Top tea companies including Tata Tea, Warren Tea, AFT and few merchant exporters have firmed up small quantities which have already been shipped to Pakistan. The deal to export two million kgs was concluded after a visit by a 13-member Indian tea delegation to Pakistan in July.

It is believed that the Pakistan industry is interested in buying Indian teas because of improved quality and demand for non-reconditioned South Indian teas with good liquoring qualities, which are comparable to the Indonesian and Sri Lankan varieties.

"As trade barriers between countries come down over the next few years under the WTO regime, Pakistan would be an attractive market for Indian teas. Pakistan's preference for good liquoring Assamese teas should secure premium prices for these varieties as well," said an industry analyst.

With a population of 135 million, Pakistan is predominantly a packaged tea market. It is believed that the share of packaged tea is declining with the imposition of high import duties and sales tax. This in turn has led to smuggling of teas into the Pakistan market. The smuggled teas which are estimated to be in the region of 158 million kgs are primarily in the loose form.

Most of the packaged tea market is dominated by Unilever which is the key player in Pakistan. Industry watchers are optimistic that Indian players should be able to supply quality teas to Pakistan which is ready to pay a high price for it.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.