Indian tea exports set to drop nearly 15% in 2021
GUWAHATI : The tea industry is bracing for a drop in exports of around 30-40 million kg this year compared to 2020, due to the availability of low-priced varieties in the global market and trade restrictions in countries traditionally strong importers, according to industry sources.
The coronavirus-induced economic slowdown in much of the world is also a factor in lower shipments, they said.
For the period January to March of this year, exports fell 13.23% from the corresponding period a year ago, and 29.03% from 2019, according to data from Tea Board India. .
A total of 45.86 million kg of tea were exported from India between January and March 2021. The figure was 52.85 million kg in 2020 and 64.62 million kg in 2019.
The decline in the share of shipments from North India has been more marked compared to South India over the past three years.
While the share of South Indian tea exports fell 5.41% in 2021 between January and March compared to the same period in 2020, the drop was 25.85% compared to 2019.
In the case of exports from North India, the figure for the three-month period was 17.83% lower than in 2020 and 31.04% lower than in 2019.
“Indian exports have suffered over the past two or three years due to the very low prices of Kenyan and Sri Lankan tea.
“The average Kenyan tea auction price is less than US $ 2 per kg, which is well below our auction average,” Dinesh Bihani, secretary of the Guwahati Tea Auction Buyers Association (GTABA), told PTI.
Kenyan tea is available for US $ 1.8 per kg ( ₹130-135 per kg) on average, while for Indian tea the average auction price is close to ₹200-210 per kg, he added.
India had exported 208 million kg of tea out of a total production of 1,255.60 million kg in 2020, while shipments accounted for 252 million kg out of 1,389.70 million kg produced in 2019.
Another source from the tea industry pointed out that there is very limited domestic consumption demand for the drink in Kenya and Sri Lanka, which means more tea is available and targeted for export.
About 80% of its production in India is sold for domestic consumption, according to an “Executive Summary of Study on Domestic Consumption of Tea” published in 2018 by the Tea Board.
Exports to Pakistan, a major market for Indian tea, have also stalled for the past three years following escalating tensions between the two countries, the industry source added.
“US sanctions against Iran are also a source of concern for Indian tea exporters,” he said.
Iran imported 9.98 million kg of tea between January and March 2020 at an average cost of ₹263.14 per kg, which decreased to 4.57 million kg for the corresponding period this year, sold at an average price of ₹246.81 per kg, according to data from Tea Board India.
“The global economy is going through a crisis due to the lockdown and COVID-19 restrictions, which has resulted in a further global decline in demand for tea,” the source said.
Domestic tea consumption is also expected to have declined since the start of the pandemic last year in the out-of-home sector (tea sold in train stations, bus stations and cafeterias), although the actual figure has yet to be revealed. identified, says Bihani.
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