DECLINE OF TEA EXPORTS IN INDIA

Recently, the exports of tea from India registered a decline of around 14.4% in the first seven months (January-July) of 2021 as compared to the same period in 2020.

Important points:

  • Total exports during January to July of 2021 was 100.78 million kilograms as against 117.56 million kilograms in the same period of 2020.
  • The CIS (Commonwealth of Independent States) block remained the largest importer of tea at 24.14 million kilograms, down from 30.53 million kilograms in the previous similar period.
  • The only exceptions are USA and UAE where exports registered an increase this period of 2021.

Reasons:

  • Exports to Iran, which was once a big buyer of Indian tea, was lower due to the sanctions by the U.S.
  • The other prime reason is non-availability of shipping containers which have become very expensive during the Covid times.
  • Due to the availability of low-cost varieties in the global market and amid trade restrictions in countries that have traditionally been strong importers.
  • Indian exports have suffered in the last two-three years due to very low prices of Kenyan and Sri Lankan tea.
  • Kenyan tea auction price average is much less than the Indian auction average.
  • About 80% of it produced in India is sold for domestic consumption, as per a 2018 ‘Executive Summary of Study on Domestic Consumption of Tea’ published by the Tea Board.
  • Exports to Pakistan, a major market for Indian tea, have also stopped since the last three years following escalation of tension between the two countries.
  • The coronavirus-induced economy has resulted in several commodities’ low production and imbalance mechanisms of the Indian economy. This has impacted exports of India’s tea along with other significant reasons.

SOURCE: THE HINDU,THE ECONOMIC TIMES ,MINT

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