May 24: Belying expectations of the Tea Board, tea exports may go below the 200 million kilogram mark for the year 1998. The demand from Russia seems to be the only hope to improve the grim scenario this year. The producers lobby, however, is not much perturbed as higher production levels will enable them to address the huge consumption needs of the Indian tea consumers. With the Kenyan crop being high already, India has hardly any scope in those markets which buy the Kenyan tea regularly. Moreover, industry watchers feel that the present nuclear tests may have its impact on countries like the US or those in Europe.Industry has almost written off orders from Pakistan as hard to come by. Given the present situation, it is most likely that fresh contracts may not come about this year. Pakistan, it is believed, is buying aggressively from the Mombasa auction.
A look into the recently released export break-up figures for the year 1997 by the Tea Board reveals that for the year 1997 Russia alone accounted foralmost 45 per cent of the total tea exported in 1997 at 90 million kgs. The hike of 136 per cent in Russian exports was a breather, when viewed at the backdrop of exports to other countries which either remained static or declined further. Infact, over 90 per cent of the increase in tea exports was accounted by the growth in exports to Russia alone. Tea exports increased by 41 mkgs from 1996 to 1997. There was a 45 mkg increase in exports to CIS countries over the same period. Exports to the UK and the Netherlands witnessed a marginal increase. India exported 26 million kg and 4.6 mkg to these countries respectively. Iraq, too registered a small rise. The industry's hopes on countries like Iran, Germany and Poland seem to have backfired. Iran after promising a contract of 9 million kg could not honour its commitment, as a result failed to open LCs altogether.
Out of a total export of 96 million kgs to CIS countries, the Russian Federation accounted for almost 94 per cent of the share, while the rest of thecountries including Ukraine, Kazakasthan, Bylorussia, registered a decline in exports. Uzbekistan remained at the 1996 level.
Although reasons for the Polish downtrend of 2 mkg is slightly difficult to gauge, the German decline of 1.2 mkg may hinge on the quality parameter. Exports to USA have remained at a constant of 4.6 million kg. The decision of the Pakistan government to contract teas to the tune of almost 3 mkgs from India up to March this year was a significant development.
Much depends on the health of the Russian economy which may turn out to be the major buyer of Indian teas in the current year. Although the industry has reported a 23 per cent growth in volume terms and an almost 77 per cent growth in value terms in the months of March, April and May, in the current year, much depends on whether the industry would be able to sustain this trend for the rest of the year.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
