Poor quality costs India the Libyan tea market

By Pratim Ranjan Bose

KOLKATA, Jan. 2. Amidst all the talks of expansion of tea export market, India has lost an otherwise stable 4 to 6 million kg market in Libya, allegedly by exporting substandard teas `not fit for human consumption'.

LMJ International, a Kolkata based Golden Star Trading House, was accused of exporting three million kg. of tea wastes in the name of orthodox (OP-1) teas in February-March 2000. The shipment was made against LCs issued in July 1999. Libya has stopped purchasing Indian teas since then. A huge import order of 15 million kg instead went to Sri Lanka in the later half of 2000 and, at a far higher price.

A prominent member of Federation of Indian Exporters Organisations (FIEO), LMJ was previously known as LM Jain. Barring some stray business in Russia and Sri Lanka, the company was focussed mainly on export of agri-commodities to Libya since 1991. The group, which has a number of companies, had bagged the Golden Star Trading House award a year ago.

Though a small country, Libya purchases a good amount of teas from the world market (mainly from India, Sri Lanka, Indonesia, China and Vietnam) through the State owned National Supply Corporation (NASCO). As India and Libya do not have direct trade relations, the LCs are generally routed through Abu Dhabi.

Confirming the news the Tea Board sources said as per the charges levelled by Libya, the teas were `found substandard' after being distributed in the market. While investigation has been initiated abroad, the Tea Board has served a show cause notice to LMJ.

LMJ has, however, denied any malpracatice. Its export manager, Mr. B. K. Agarwal, blamed his competitors for ``spreading the misleading information''. The company also claimed to have in possession the pre-shipment inspection certificate issued by Orient International of Cyprus (the off-shore arm of a Libyan company) which had inspected the consignment quality on behalf of the Libyan buyer.

However, NASCO, after failing in its efforts to solve the problem amicably (by way of realising a refund from LMJ), is reported to have filed a case in the Libyan court.

It may be noted that this is not the first time Indian companies are accused of exporting substandard teas. Similar incidents were reported from Russia and Tunisia in the recent past. According to a Tea Board circular dated December 20, the Tunisian procurement agency, OCT, had blacklisted at least four Indian exporters for ``failing to meet the quality or the time deadline''.

Informed sources in the tea industry feel that there is sufficient reason for the Commerce Ministry to start an independent enquiry about the quality of Indian tea exported to Iraq.

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