India’s tea industry is expecting a decline in exports by almost 30-40 million kg this year as compared to 2020, due to the availability of low-cost varieties in the global market and amid trade restrictions in countries that have traditionally been strong importers.
The coronavirus-induced economic downturn in much of the world is also a factor for falling shipments. For the period between January to March this year, exports have fallen by 13.23 per cent as against the corresponding period a year ago, and by 29.03 per cent compared to 2019, as per data from Tea Board of India.
Altogether, 45.86 million kg tea was exported from India between January to March in 2021. The figure was 52.85 million kg in 2020 and 64.62 million kg in 2019. The dip in the share of shipments from North India has been more compared to South India for the last three years.
While tea export share of South India fell by 5.41 per cent in 2021 between January and March compared to the same period in 2020, the decline was 25.85 per cent compared to 2019. In case of exports from North India, the figure for the three-month period was lower by 17.83 per cent as against 2020 and 31.04 per cent compared to 2019.
Indian exports have suffered in the last two-three years due to very low prices of Kenyan and Sri Lankan tea. Kenyan tea is available for 1.8 US dollars per kg (Rs 130-135 per kg) on an average, while for Indian tea, the average auction price is nearly Rs 200-210 per kg.
India had exported 208 million kg of tea out of the total production of 1,255.60 million kg in 2020, while shipments accounted for 252 million kg out of 1,389.70 million kg produced in 2019. The US sanctions against Iran has also been a cause of concern for Indian tea exporters. Iran imported 9.98 million kg of tea between January and March 2020 at an average cost of Rs 263.14 per kg, which decreased to 4.57 million kg for the corresponding period this year, sold at an average price of Rs 246.81 per kg, as per Tea Board of India data.