Indian tea in demand as global rates rise

KOLKATA: India’s tea exports rose 3 per cent in the first two months of 2018 from a year ago following an increase in the prices of Sri Lankan and Kenyan teas that made Indian teas more competitive in the global market.

Sri Lanka’s premium orthodox teas are priced at $ 5 per kg while Indian varieties are 20 per cent cheaper on average, at $ 4 per kg. Similarly, in the case of the traditional black teas or CTC, Indian teas are selling at $ 3 per kg, lower than $ 3.5 per kg being charged for the Kenyan varieties.

India has an edge over both Sri Lanka and Kenya in tea exports this year, said Azam Monem, director of McLeod Russel India, the world’s largest integrated tea company. “Although prices of Kenyan tea, our biggest competitor in the world export market, have seen a correction of 20-30 cents per kg, they are still ruling higher.”

In 2017, India clocked the highest tea exports in 36 years, at 240.68 million kg, with a year on-year increase of 8.2 per cent. In 1981, the country had exported 241.25 million kg of teas. The total value of tea exports in 2017 stood at Rs 4,731.66 crore, up 5.9 per cent or Rs 263.55 crore in a year.

“Orthodox tea is expected to be a game changer this year for Indian tea exports,” said Monem, who is also the chairman of Indian Tea Association. “Iran and Iraq will be the two major destinations for orthodox teas this year. China and Egypt are also emerging as major black tea markets for India. So this year we can expect a good export market.”

Back home, Monem said, although prices of first flush Assam teas have appreciated 15 per cent, offtake has been less at the auctions as major packet tea players had bought good volumes of end season cheap teas that were available at the auctions between January and March.“It is early days yet and the new season teas have just arrived, but we are not seeing 100 per cent absorption of teas at the auctions. About 70 per cent of the teas are being absorbed by packet tea players and other retailers,” he said.