‘Exporting 300 mn kg tea critical for small, large growers’

Strict quality, chemical and pesticide residue standards important for boosting shipments: Tea Board

Achieving a medium-term export level of 300 million kg is critical to the sustenance of the organised segment and the small tea growers, the tea industry has said, adding that government support, in the form of enhanced incentives for various schemes, was crucial

This support was sought by the industry during a recent interactive session organised by the Tea Board of India to explore ways and means to enhance tea exports under the new Agri Export Policy, 2018.

Pointing out that Indian tea exports usually hovered around the 230-million-kg mark, industry was concerned that in face of increased production, a surplus stock of about 75 million kg was being generated annually. This may not be absorbed by domestic consumption. In 2017, India produced 1,322 million kg of tea, imported 20 million kg with exports of 252 million kg. Domestic consumption was 1,000 million kg, leaving a surplus of 90 million kg.

Commerce Ministry officials present at the meeting – Praveen Bonigala, Joint Secretary (Plantations) and Arun Kumar Ray, chairman and deputy chairman, Tea Board, concurred that strict compliance of quality, chemical and pesticide residue level standards were important for boosting exports. Mr. Ray also stressed on the importance of increased co-operation between the large estate players and the small tea growers who now comprised a formidable chunk (about 48%) of the India tea industry.

He wanted the small tea segment to develop greater awareness on quality compliance and large industry, to emphasise on exports of orthodox and organic teas.

Export incentive scheme

Industry, on its part, wanted enhanced MEIS rate (merchandise exports incentive scheme) which, they said, would enable India to increase orthodox tea exports to destinations like China, Russia,Iran and Iraq which were big markets for these type of teas. Orthodox teas are created by a different manufacturing and processing method (against the conventional CTC teas), which pave way for a more flavourful brew. However, the cost of production, too, is higher. Tea Board officials said that provisional figures show India produced 90.6 million kg of this variety of tea and exported 62.1 million kg between April and October 2018.

Industry sought a hike in the subsidy rate provided by the Tea Board to bridge the cost gap between CTC and orthodox teas. It also wanted easier freight rates.