Tea exports see double-digit increase in prices this year

Kolkata: A stagnation or marginal drop in exports volume notwithstanding, India managed to earn 10.93 per cent more from tea exports till September this calendar year, compared to what it had earned in January-September 2018. And this can be attributed to 11.77 per cent increase in the price realised, Tea Board of India statistics showed.

With the global prices having headed northward, Indian teas fetched Rs 227.67 a kg on average till September against Rs 203.69 during January-September 2018. That is, every kg fetched Rs 23.98 more than it did last year, marking a gain of 11.77 per cent.

Going by Tea Board data, tea exports from India remained nearly stagnant in the first 8 months of 2019 (from January to August). Tea exports stood at 162.18 million kg during the period from January to August 2019, compared to 162.15 million kg in the same period last year (2018). Over all tea exports from India during 2018 stood at 249.11 million kg.

This coincided with Indian tea facing stiff competition from African teas in the UK, European Union and Pakistan as prices of the tea grown in Europe have declined significantly.

In another significant development, Kenya tea prices have fallen 22 per cent in a year and the Uganda crop is cheaper by 36 per cent.

Oversupply has caused the prices of African teas to fall to five year lows, which, in turn, has been impacting Indian tea exports. This is understandable because India cannot offer teas at prices lower than the Africa tea. Mind you that the cost of production of tea is very high in India and any attempt to export teas at a lower price is bound to lead to heavy losses.

Offtake by the CIS countries, that figure among the top importers traditionally, are lower at 36.63 million kg compared to 41.35 million kg registered in January to August 2018. The other key tea importing country — Iran showed a steep jump at 40.96 million kg in January to August 2019 as against 17.98 million kg in the last eight months.

On the domestic front, Tea Board of India statistics showed that tea prices in the first three quarters (Q3) of the current calendar in all the auction centres in the country have increased by 4.44 per cent over Jan-Sept 2018. Prices have increased in the auction centres in both the North and South, thereby proving an overall improvement in the prices all over the country. The average price in all the auction centres in the country till September went up to Rs 141.94 a kg from Rs 135.91 in January-September 2018, up by 4.44 per cent.

Quite interestingly, prices of CTC, the most common black tea sold locally, are not picking up. The Tea Board is not sitting idle. It is working on a plan to boost tea prices through modification of the auction system. It is also working on ways to enable sellers to reach out to a larger buyer base, and improve the quality of tea.