Tea exports, after showing a healthy rise by volume and value in 2015-16, may decline this fiscal year due to a bumper crop in Kenya and lower prospects in some of the key markets.
Between April and October 2016 exports stood at 119 million kgs against 127 million kgs of the same period in 2015. India exported 232.9 million kgs in 2015-16 , rising by 17 million kgs over the previous year and breaching the 230-million-mark for the first time since 1980-81, according to official statistics.
Earnings from tea exports are estimated at Rs. 2,460 crore against ₹2,518 crore between April and October 2015.
Lower exports to Russia (annual buy of around 45 million kgs) , U.K., U.S., Bangladesh and Pakistan were factors that may cause the decline, according to Sujit Patro, secretary, Indian Tea Association.
Bumper crop in Kenya (over 50 per cent rise according to latest statistics) and Bangladesh, which is slowly emerging as tea- growing nation led to excess supply and lower prices in the international market. In 2015, Bangladesh had a crop of 66.4 million kgs . However Sri Lanka, India’s arch-rival in the international arena, too saw a sharp decline in the commodity’s output.
Indian teas however have held their unit-prices, selling at Rs. 206.6 per kg against Rs. 197.8 per kg . Prices were higher in dollar terms too.
On the production front, Tea Board said that all-India production has been higher at 1,110.5 million kgs between April and November 2016 as North Indian gardens increased their output helping overcome the shortfall caused by a sharp decline in May.
Although production recovered since then, but the gap could not be bridged. India has closed 2015-16 with a tea crop of 1233.1 million kgs . Also. this would be the second year of reverses in South Indian production, mainly due to adverse weather.
Azam Monem, chairman of the Indian Tea Association said that South India faced its worst drought this year.
On exports he said that India lost market in the first half of this fiscal, when it could not match the crop and the prices offered by Kenya. “ This loss extended to all the markets including the U.K., U.S. and Pakistan,” he said.
