Challenges and Contrasts: The Complex Landscape of Indian Tea Exports
In the intricate dance of global tea trade, India, a key player, faces a looming challenge. Anticipated figures suggest a steep descent of nearly 15% in Indian tea exports for the year 2021.
The recent years have seen Indian exports grappling, primarily due to the rock-bottom prices of Kenyan and Sri Lankan tea flooding the market.
Industry insiders paint a somber picture, predicting a substantial drop of 30-40 million kg in exports this year compared to the preceding year. The proliferation of low-cost tea variants globally, coupled with trade constraints in traditional import strongholds, compounds the situation. The ripple effects of the pandemic-induced economic downturn further exacerbate the downturn in shipments.
Data from the Tea Board India underscores the grim reality. Export figures for January to March 2021 reflect a 13.23% decline from the corresponding period in the previous year and a staggering 29.03% plunge from 2019.
The geographical divide in export shrinkage is stark. South India bears a 5.41% decrease compared to 2020 and a substantial 25.85% nosedive from 2019. Meanwhile, North India witnesses a sharper decline of 17.83% vis-à-vis 2020 and a significant 31.04% drop from 2019.
A crucial factor in this downturn is the stark contrast in auction prices between Kenyan and Indian tea. Kenyan tea fetches a mere $1.8 per kg on average, significantly lower than the Indian average auction price of nearly Rs 200-210 per kg.
The cessation of exports to Pakistan, a major market, for the past three years due to geopolitical tensions, further exacerbates the situation. Similarly, US sanctions against Iran cast a shadow on Indian tea exports.
The global tea market feels the reverberations of the COVID-19 crisis, with dwindling demand amplifying the woes of Indian exporters. The pandemic’s impact on domestic consumption remains a subject of concern, particularly in out-of-home sectors like railway stations and cafeterias.
In essence, the Indian tea export landscape navigates through turbulent waters, grappling with multifaceted challenges ranging from global market dynamics to geopolitical tensions and the unprecedented disruptions caused by the pandemic.