Business

Global gloom casts shadow on tea units

KOLKATA: Even as the global financial gloom cast its shadow on Indian tea industry, exporters are still optimistic of closing the year with higher exports compared to 2007. Between January and September 2008, exports were 15.4 million kg more than what they were in the same period in 2007.

However, exporters are worried about the problems they are facing on exports backed by letters of credit and are now planning to de-risk their business by shifting to other modes of payment such as telegraphic transfer and spot cash for export consignments, a senior official at the industry apex body, the Indian Tea Association, said.

Although official figures were awaited, in September 2008, tea exports showed a decline over September 2007. But exporters felt that the year would end with exports of about 200 million kg against 180 million kg in 2007.

“Earlier, there were hopes of exports touching a level of about 205-210 million kg, achieving this figure has become uncertain now”, they said.

Countries on which Indian exporters were pinning their hopes included Egypt, which has already imported 10 million kg against 4.5 million kg in the whole of 2007. Pakistan too looked promising due to the drop in output in Kenya which was Pakistan’s main import source.

As for the domestic market, sources said that led by South India (which contributed a 10 per cent rise), output had increased by 2.5 per cent in the first nine months of 2008. This increase came at a time when most other black tea producing nations, especially Kenya and Indonesia (but barring Sri Lanka), suffered output losses. India’s production stood at 706.7 million kg during this period, up by 17.5 million kg.

On the price front, Indian prices have gained at the auction centres of Kolkata, Guwahati and Kochi. ITA officials said that prices had dropped after September but has revived now.

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