Tea Exports From India Likely To Dip 15% In 2021

Data from Tea Board India revealed that between January-March this year, the export of tea from India reduced by 13.23 per cent against the corresponding period in 2020 and 29.03 per cent compared to 2019. This corresponded to a decline in exports amounting to 30-40 million kg compared to last year.

The reason behind this is the availability of cheaper varieties in international markets. The varieties have also been available amid the trade restrictions in the countries which have conventionally been substantial importers of tea from India. The failing shipments might also result from the pandemic-induced economic downturn faced by significant portions of the world.

Between January-March 2021, India exported 45.86 million kg of tea. In 2020 and 2019, this figure was 52.85 million kg and 64.62 million kg, respectively, reported Business Standard.

North India Expereinces Substantial Dip

Notably, the drop in share of shipments has been more in north Indian than south India since the last three years. South India's tea export fell by 5.41 per cent compared to 2020 and 25.85 per cent compared to 2019. In contrast, the share in North India fell by 17.83 per cent compared to 2020 and 31.04 per cent compared to 2019.

Guwahati Tea Auction Buyers Association (GTABA) Secretary Dinesh Bihani said, "Indian exports have suffered in the last two-three years due to very low prices of Kenyan and Sri Lankan tea." Elaborating on their prices, he noted that the auction price range of Kenyan tea is below 2 USD/kg, which is much less than the auction average of Indian tea. It is available for 1.8 USD/kg (₹ 130-135/kg) on average, while the average auction price for Indian tea is almost ₹ 200-210/kg.

Out of the overall production of 1,255.60 million kg in 2020, India had exported 208 million kg of tea. In 2019, shipments accounted for 252 million kg out of 1,389.70 million kg produced altogether.

Effect Of Domestic Consumption

According to a source in the tea industry, there is very little domestic tea consumption in Sri Lanka and Kenya. This makes more tea available and targeted for export. In contrast, nearly 80 per cent of tea produced in India is sold for domestic consumption, as per Tea Board India's 'Executive Summary of Study on Domestic Consumption of Tea'.

Perhaps even the domestic consumption of tea has reduced since the beginning of the pandemic last year, though data on this is yet to be found. Not just the domestic consumption, the pandemic-induced economic crisis has globally brought down the demand for tea. Also, Pakistan was a major market for Indian tea. But exports to the country have stopped since the last three years following the growing tiff between two countries. Sanctions of the US sanctions against Iran is also a matter of concern for the tea exporters of India.

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