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India hardsells its cuppa to Pak
By B Shankar
India is making another push to hardsell its cuppa in Pakistan. In fact, when External Affairs Minister Pranab Mukherjee landed in Islamabad on January 13, tea was one of the main items on his menu. And side by side high diplomacy, Mukherjee and the business delegation accompanying him talked hard business over a cup of tea.
Back home, the tea industry now sees a lot of hopes that tea exports to the neighbouring country will witness a boost next fiscal. It can be noted here that Pakistan has been emerging as a key export destination for tea in the global market.
India, the world's largest producer and consumer of tea, managed to export just about 18 million kg of tea to Pakistan in 2006. This is no doubt a sharp rise from 10 million kg exported during 2005. But India has been looking to increase the exports further considering the fact that Pakistan consumes over 170 million kg of tea every year.
Pakistan is the largest importer of tea in the world with annual imports of around 140 millon kg. But over 80 per cent of its tea requirement is met by Kenya. Indian Tea Association says tea traders of India and Pakistan have been working together for the past few years to facilitate an increase of India's tea exports to Pakistan.
After a major drought damaged crops in Kenya last year and pushed up prices, Pakistan was in a way forced to look to India for tea supplies. India took the advantage to boost its sales, but the figures have still remained too small when compared to Pakistan's total requirement.
India's 18 million kg of tea exports to Pakistan is still a big improvement considering the fact that the neighbouring country had imported only 9.5 million kg of Indian tea in 2005, accounting for just over seven per cent of the country's total tea imports.
Indian tea garnered better prices too. The price realisation in Pakistan, on an average, had crossed Rs 100 per kg that year. In the earlier years, the same quality tea had fetched a much lower value. In 2004, Pakistan had imported only 3.5 million kg of Indian tea.
The commerce delegation accompanying Pranad Mukherjee to Pakistan mainly pushed for higher tea imports from India. They also pressed the Pakistani side for the removal of import duties on tea and to agree to a shipping protocol for the route between the Indian port of Kochi and Pakistani port city of Karachi to bring down the export costs.
At present, Indian exporters are paying 10 per cent duties on tea exports. Indian trade and industry has been pushing for a complete withdrawal of import duties on both countries.
India is estimated to have produced 945 million kg of tea in 2006 as compared to 928 million kg in 2005. Tea exports during the year stood at 195 million kg as compared to 192 million kg in 2005. The tea industry has been trying to reach the export target of 200 million kg during the current year.
India's tea exports to traditional destinations in the Commonwealth countries and Europe, North America, Australia and Japan have witnessed a slump in the past few years and the industry is hard-pressed to explore newer markets in order to maintain its growth profile.
