Tea imports from Lanka on the rise
Mumbai, August 3:
Tea imports from Sri Lanka have been rising steadily in last few months despite India being the second largest producer in the world.
The strong domestic demand for quality tea and opportunity to re-export Lankan tea to other markets has pushed up imports in the first half of this year. Shipments from Sri Lanka increased multi-fold between January and June this year to 2,930 tonnes against 352 tonnes logged in the same period last year. In value terms it was up seven times at 418 crore (SL 2,005 million) against 50 crore (SL 244 million) recorded in the first six months of last year.
Sampath Perera, Director, Sri Lanka Tea Board, said some of the speciality teas such as Orthodox tea, Ceylon super pekoe black tea, Ceylon green tea and instant tea have gained huge traction in India with changing lifestyles and large-scale urbanisation.
“According to trade sources, we hear that India has started barter trade with Iran due to currency exchange restriction on the back of economic sanctions. Hence, Indian tea exporters have been re-exporting Ceylon orthodox tea to Iran for oil,” he said.
With Indian tea producers giving preference to exports, there is shortage of good quality premium tea forcing Indian branded tea companies to buy premium tea from Sri Lanka and Kenya.
According to Commerce Ministry data, India’s tea imports in value terms grew 33 per cent during 2014-15 to 381.58 crore over the previous year’s 284.96 crore.
However, the domestic tea industry is unperturbed by the surge in tea imports from Sri Lanka. As part of the free trade agreement with Sri Lanka, the island nation can export up to 15 million kg (mkg) or 15,000 tonnes at concessional duty to India.
Sri Lanka is the largest producer and exporter of the orthodox black tea in the world. Russia is the single largest buyer of Ceylon Tea and with other CIS countries the region accounts for 24 per cent or 75 mkg of the annual Sri Lanka tea export volume.
China, India, Sri Lanka, Kenya and Indonesia account for 77 per cent of world tea production and 80 per cent of global exports. India is a leading producer of black tea in the world with an annual production of about 1,100-1,200 mkg and exported around 200 mkg last year.
(This article was published on August 3, 2015)
http://www.thehindubusinessline.com...rts-from-lanka-on-the-rise/article7496065.ece
