Tea exports to Turkey may open more markets

Tea exports to Turkey may open more markets
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First Published: Tue, Nov 13 2007. 11 14 PM IST

Greener pastures: The tea industry hopes that Turkey can become a gateway to Europe as well as Central Asia.
Greener pastures: The tea industry hopes that Turkey can become a gateway to Europe as well as Central Asia.
Updated: Tue, Nov 13 2007. 11 14 PM IST
Kochi: The Indian tea industry is pinning its hopes on the new market in Turkey, which has annual consumption figures of nearly 200 million kg.
The industry is also hoping that Turkey can become a gateway to Europe as well as Central Asia.
During the international food and beverage exhibition at Istanbul in Turkey, held from 31 October-4 November, the prize-winning teas of the second and third editions of The Golden Leaf Indian Award (TGLIA) for South India, organized annually by the United Planters’ Association of Southern India (Upasi) and the government trade promotion body Tea Board, were displayed.
N. Dharmaraj, convener of TGLIA, says the response to the teas was tremendous. Enquiries have been pouring for these teas, especially the higher quality orthodox varieties. Nearly 60 prospective buyers have so far made enquiries.
Greener pastures: The tea industry hopes that Turkey can become a gateway to Europe as well as Central Asia.
Turkey produces around 140 million kg of tea annually. It exported around 9 million kg of the beverage during 2006, while its imports were around 6 million kg. An advantage for India, according to Dharmaraj, is the high domestic tea consumption in Turkey—around 2.5kg per person annually.
In contrast, it is around 800gm in India, which produces around 950 million kg annually and exports around 204 million kg, mainly to Russia, the United Arab Emirates, the UK, Pakistan, Iran and the US.
The teas produced in Turkey appear to be of inferior quality and are not internationally competitive.
The high import duty levy of 145% limits tea flows from outside to 6 million kg, although nearly 20-25 million kg is smuggled into Turkey. Import duty apart, there is an additional 18% tax on bulk teas and 8% on packet teas.
“On the face of it, it may appear that export to Turkey may be difficult because of the duty structure,” Dharmaraj says. “But discussions with some of the main tea traders there showed that even at the high price of Rs300-350 per kg for retail tea, export of Indian teas was relatively cheaper than the average retail price there.”
The Turkish government-promoted tea firm, Caykur, has a near monopoly over buying and processing of tea. Caykur controls nearly 70% of the total tea market in the country.
However, the private players, who control 30% of the market, are keen to source some of the award-winning teas. A major tea producing private firm, Selen & Co., held a series of discussions for procuring these teas.
“There is a misconception among Turkish buyers, as well as consumers, that Ceylon teas are from Hindisthan (India in Turkey). The fair helped in clearing this misconception. With a further initiative from the industry here, Turkey can easily act as a gateway to Europe as well as Central Asia,” Dharmaraj says.
Ullas Menon, secretary-general of Upasi, says that in the wake of non-payments for a large part of the 42 million kg exported to Iraq during fiscal 2007, the Indian tea industry is not interested in exporting there. “It is in search of new markets and Turkey can help us make an entry into Central Asian countries,” he says.
According to Dharmaraj, the fourth edition of TGLIA for the best of South Indian teas from different zones is scheduled to be held in Dubai, in March next year.
“This will be the ideal time since we will be able to have the best of the winter flavour teas for the contest, which will give a further impetus for South Indian teas abroad,” Dharmaraj adds.
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First Published: Tue, Nov 13 2007. 11 14 PM IST