For India, the world’s second biggest tea producer, there is a scope to increase exports of the brew to close to 350 million kgs by 2025.
Tea exports from India are expected to increase to around 230 million kg during this calendar year from 196 million kg last year on the back of buoyancy in export markets and Sri Lanka’s loss of crop, according to Indian Tea Association (ITA).
“It is satisfying to note that exports are showing a higher trend this year by 12.6% during January to July. I am glad to note the increase in exports this year to Iran, Iraq and the UAE. With sustained efforts we have made inroads into Turkey and Syria. Export in 2022 is estimated to touch 230 million kgs which would be a remarkable increase from 196 million kgs of 2021,” Indian Tea Association chairperson Nayantara Palchoudhuri said while speaking at the 139th annual general meeting of ITA here on Thursday.
“Considering the buoyancy in the export markets such as Iran, the United Arab Emirates, Iraq etc we expect that we can touch 225-230 million kgs of exports in this calendar year. Taking into account Sri Lanka’s loss of crop, India has made inroads in new markets like Syria, Libya and Turkey etc during 2022,” said Sujit Patra, secretary, ITA.
For India, the world’s second biggest tea producer, there is a scope to increase exports of the brew to close to 350 million kgs by 2025. “To achieve the exports of 350 million kgs by 2025, there is strong need for making more orthodox tea and sustained tea promotions in overseas markets,” Patra told FE.
Notably, Tea Board India has sought an assistance of around Rs 1,000 crore for the country’s tea industry from the government over the next five years starting financial year 2022-23. The Tea Board has sought the assistance from the ministry of commerce and industry for supporting small tea growers (STG), providing subsidy on orthodox tea, research, technology and promotion to ramp up domestic and international consumption, said chairman Saurav Pahari.
Pahari was talking to the media on the sidelines of the AGM of Indian Tea Association. “We have submitted our five years budget to the ministry. It mostly focuses on handholding the small tea growers as they account for almost 52% of tea production at the moment. We have proposed an orthodox tea subsidy. The subsidy proposed is almost of the same level which was there earlier,” the Tea Board chairman said.
Considering demand for Indian orthodox tea in the international market and producers difficulties in making orthodox tea due to huge cost differentials vis-a-vis CTC tea, the Tea Board has recommended industry’s requests for bringing back the orthodox tea incentives to the commence ministry, industry insiders said.
The subsidy was Rs 3 per a kg for production of orthodox leaf and Rs 2 a kg for the dust under the earlier scheme. In the last fiscal the subsidy on orthodox tea had been withdrawn and that has impacted orthodox productions and exports in 2021-22.
Orthodox tea accounts for nearly 10% of the country’s annual tea production.
Palchoudhuri said tea producers are under severe financial stress for the last few years with price realizations not keeping pace with rising cost of production putting their sustainability in question.
According to Palchoudhuri, there is a need to restrict “unfettered addition” of new areas into tea so as to keep the balance between demand and supply to ensure that both big and small growers are able to coexist and the industry remains economically viable. “Influx of average quality teas from some of the countries of late at cheap landed costs is causing concern. This can compromise whatever correction of demand supply mismatch has been achieved by production curbs and lead to depression in prices. Import of teas which are not FSSAI compliant should not be allowed in order to ensure a level playing field for producers,” she pointed out.