Kochi: The Tea Board, a government-run trade promotion body, plans to impose tougher quality checks while granting export licences for all kinds of tea, including low-priced varieties, after Iraq complained about the poor quality of some consignments.
India had exported 41.33 million kg of tea worth Rs211.92 crore to Iraq in 2006, the highest to any country that year, but the traders here did not get payments for the consignments.
After recent deliberations with Iraqi authorities at the instance of the Tea Board and Jairam Ramesh, Union minister of state for commerce and power, Iraq agreed to make a partial payment, but raised questions over the quality of shipments. “The Tea Board now proposes to ensure minimum quality for even low-priced tea (which cost $1.5-1.75 or around Rs65-75 a kg),” said Basudev Bannerjee, chairman of the board, after discussions with exporters and senior government officials.
Tea trouble: India’s tea exports to Iraq fell to a little over 2 million kg in 2007 after payments were delayed for the previous year’s exports, which totalled 41.33 million kg worth Rs211.92 crore. (Photo: Pankaj Nangia /Bloomberg)
Following the 2006 development, Indian tea exporters mostly kept away from Iraq and exports to the country fell to a little more than 2 million kg in 2007. The Tea Board now expects to export 15 million kg of tea to Iraq in 2008.
Some exporters, sore that they received only partial payments, allege that traders in Iraq are raising an issue over quality only to stop payments.
Iraqi authorities had said they rejected some tea exports from India on account of poor quality, as in the case of Kolkata-based Vikrama Impex Pvt. Ltd. They had rejected 719 tonnes of the company’s 1,219 tonnes of tea exported.
Kapil Sharma, manager in-charge of Vikrama Impex’s export business, said the company’s tea shipment to Iraq were tested in Kolkata and had conformed to quality standards.
Vikrama Impex later recalled the material and exported it to various other destinations, he said. Sharma added that the company is yet to receive payments for the rest of its tea exported to Iraq and has decided not to do business with that country. Tea Board’s Bannerjee said the board has sought clarifications on the issue from Iraqi authorities.
In 2004, the Indian tea industry had faced a situation where a 1,200-tonne consignment to Libya had failed quality tests in India, but passed those in Libya. The Tea Board later made it mandatory for all imports and exports of tea to meet the prevention of food adulteration standards.