Trade with Commodities: India’s tea import bill shoots up 108% y-o-y

Monday, May 4, 2009

India’s tea import bill shoots up 108% y-o-y

Average Price Rises To Rs 77.17/Kg From Rs 66.83/Kg In 2008

INDIA'S tea import bill has shot up sharply in calendar 2009 over 2008. Figures released by the Tea Board show that in the first two months of 2009, India imported 3.40 million kg, compared with 1.89 million kg in the earlier corresponding period, at a much higher price.
    The average price of imported tea rose to Rs 77.17 per kg from Rs 66.83 per kg in the previous year. Consequently, the overall import bill more than doubled to Rs 26.29 crore from Rs 12.63 crore, clocking a growth of 108%.
    Tea entered India from a variety of countries, including Indonesia, Nepal, Sri Lanka, Vietnam, Kenya, China, Argentina, Malawi, etc. The largest volume of 7.90 lakh kg — last year's peak was 1.37 lakh kg — came from Vietnam, closely followed by Nepal at 7.80 lakh kg (3.38 lakh kg). The costliest tea came from Sri Lanka at Rs 282.54 per kg (Rs 117.64), followed by Kenya at Rs 124.13 (Rs 76.50), while the cheapest varieties came from Argentina at Rs 49.87 (Rs 60.50), followed by Vietnam at Rs 58.78 (Rs 53.78). India imports tea for re-export to other countries. The imported tea is not consumed in the domestic market. "The only area of concern is that poor quality tea should not be imported for re-exports, which may tarnish the image of Indian tea in global markets," said a senior tea industry official.
    While the tea import bill has shot up in the first two months of calendar 2009, India's tea exports increased by 26% to Rs 2,282 crore in 2008, compared with Rs 1,810 crore in 2007. The increased earnings came on the back of improved exports — from 178.75 million kg in 2007 to 196.03 million kg in 2008 — and increased tea values.
    The unit price stood at Rs. 116.39 per kg against Rs 101.26 a kg. Notwithstanding the political face-off with Pakistan, tea exports to the country increased. The rising price trend continued in the current year with an upward trend evident in the world average prices at auction centres in Mombassa (for Kenya), Colombo, Chittagong, Jakarta and India in the first three months of 2009. In 2008, India suffered losses in volumes in its single largest tea market Russia, which imported 3.3 million kg of tea, although at higher prices. Another CIS country, Kazakhstan, however, consumed more of Indian tea and that too at a high value of around Rs 122.9 a kg.