Industry experts say more Indian tea will be exported to Egypt this year following the Egyptian government’s decision to source six million kg tea from outside Common Markets of Eastern and Southern Africa (Comesa), a trade organization of countries in the region.
Egypt joined Comesa in 1998 and procures tea through two agencies, El Nasar and Misr. Initially, a 50% duty was imposed on import of teas outside the member countries of Comesa, and that led to India losing its foothold in Egypt. Since then, the duty has been brought down in stages. It is now pegged at 2%, giving India an opportunity to regain the market. Egypt, which imports close to 80 mn kg of tea, depends primarily on Kenya.
During the calendar year 2006, India exported around 2.7 million kg to Egypt, up from 0.37 million kg the previous year.
Basudev Baneerjee, chairman of Tea Board of India, visited Egypt in March to look at the prospects of promoting Indian tea and setting up anIndian Tea Trade Centre in Cairo.
Modelled on a private-private participation venture, the proposed tea centre will be run by the Indian Tea Association, a body of growers and trade in West Bengal, Assam and North-East, and the United Planters Association of South India, representing tea growers in South.
The Tea Board will support the venture under the market access initiative by paying 75% of the rentals in the first year, 50% in the second year and 33.33% in the third year.
A fall in production did not dampen India’s tea exports during last financial year. It rose to 202.94 million kg from 196.67 million kg, with South India posting a new record of exporting 115.9 million kg, beating the previous best of 106.8 million kg in 1997-98. Pakistan was the focus last year with exports rising to 16 million kg from around 12.5 million kg in the previous year. Traders expect it to rise to 20 million kg this year.
S. Sriram of Coimbatore-based broking firm Contemporary Tea says tea produced in South India should make its way to Egypt, which has a preference for CTC (crush, tear, curl) teas with strong liquor.
In Pakistan, the demand is for black and granular teas of inferior quality, used for blending with other teas.
Since Pakistan is quoting around $1 a kg (Rs41) for such teas, exports to Pakistan are unlikely to improve as South India is now producing quality teas that could end up in Egypt, Sriram says.
Pakistan sources around 70% of its 135 million kg imports from Kenya.
The price for Kenyan tea has fallen $1-1.5 from $2.5-3.20 a kg last year, following a glut in production.
In the first quarter of current financial year, Kenya has produced around 120 million kg of tea against 35 million kg produced in the comparable quarter last year when Kenya was reeling under drought.