EXPORT OF COMMODITY (TEA FROM INDIA

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Submitted To: Prof Amrinder Singh

Submitted By: Anupreet Bhatia 319 MBA GB 2

INDIAN TEA INDUSTRY

West Bengal. Manipur. In 1838 the first Indian tea from Assam was sent to United Kingdom for public sale. The weightage lies with the former due to domestic consumers’ . Tamil Nadu and Kerala. The other areas where tea is grown to a small extent are Karnataka. Unlike most other tea producing and exporting countries.Uttaranchal. Arunachal Pradesh. and Bihar. Nagaland. owing to certain specific soil and climatic requirements its cultivation was confined to only certain parts of the country. Robert Bruce in 1823 discovered tea plants growing wild in upper Brahmaputra Valley.The tea industry in India is about 172 years old.Mizoram. Himachal Pradesh. Meghalaya. It occupies an important place and plays a very useful part in the national economy. India produces both CTC and Orthodox teas in addition to green tea. Thereafter. Tripura. it was extended to other parts of the country between 50's and 60's of the last century. Tea plantations in India are mainly located in rural hills and backward areas of North-eastern and Southern States.However. Major tea growing areas of the country are concentrated in Assam. India has dual manufacturing base. Sikkim.

in 2008 as much as 802 M. increase in income and standard of living etc.Production of green tea in India is small.Kgs of tea was retained for internal consumption. Orthodox tea production is balanced basically with the export demand. There was an inherent growth in export earnings from tea over the years. Indian Tea exports to Russia/CIS countries recovered from the setback since 1993 under Rupee Debt Repayment Route facilities as also due to long term agreement on tea entered into between Russia and India. Depressed scenario again started since 2001 due to change in consumption pattern.There has been a dramatic tilt in tea disposal in favour of domestic market since fifties. . greater urbanisation. USSR happened to be the major buyer of Indian tea accounting for more than 50% of the total Indian export till 1991.Kgs or about 82% of total production of 981 M. While at the time of Independence only 79 M. Indian Tea Plantation Industry is able to maintain substantial growth in relation to volume of Indian tea production during the last one decade.Kgs or about 31% of total production of 255 M. Indian tea exports suffered a set back from 1992-93. switch over from CTC to Orthodox as per consumer preference and thus India has lost the Russian market. Indian tea export has been an important foreign exchange earner for the country.e. Such a massive increase in domestic consumption has been due to increase in population. Tea is an agro-based commodity and is subjected to vagaries of nature. The competitors to India in tea export are Sri Lanka. Kenya is basically a CTC tea producing country. South Asian countries like Indonesia and Vietnam. i. Another reason for decline in export of Indian tea to Russia is offering of teas at lower prices by China. with the disintegration of USSR and abolition of Central Buying Mechanism. China and Indonesia. Till 70s’. Kenya. Indonesia and Vietnam. While India is facing competition from Sri Lanka and Indonesia with regard to export of orthodox teas and from China with regard to green tea export. Kenya. However.Kgs of tea went for domestic consumption. However. The major competitive countries in tea in the world are Sri Lanka. China is the major producer of green tea while Sri Lanka and Indonesia are producing mainly orthodox varieties of tea.preference. UK was the major buyer of Indian tea Since 80s’ USSR became the largest buyer of Indian tea due to existence of the trade agreement between India and erstwhile USSR. China. Despite adverse agro climatic condition experienced in tea growing areas in many years. it is facing competition from Kenya and from other African countries in exporting CTC teas.

All India – 945. Tea is also considered as the cheapest beverage amongst the beverages available in India. All India – 972. Sri Lanka and Kenya have an edge over India to offload their teas in any international markets. All India – 183. Presently. Indian tea industry is having (as on 18. after Indianisation due to implementation of FERA Act started tea cultivation in Kenya.99 million . So.27 million Tea Exports (kg) 2008-09: South India – 86. Tea Industry provides gainful direct employment to more than a million workers mainly drawn from the backward and socially weaker section of the society.74 million.K has substantial interest in tea cultivation in Kenya.12. Another important point is that. This is one of the reasons of higher volume of export by Sri Lanka and Kenya compared to India.77 million 2007-08: South India – 227.9000 Crs. to buy tea from Kenya and Kenya became the largest supplier of tea to U.Because of absence of large domestic base and due to comparatively small range of exportable items. U.14 million. it makes business sense for U.K. STATISTICS Tea Production (kg) 2008-09: South India – 238.2009 ) • 1692 registered Tea Manufacturers. • 2200 registered Tea Exporters. • 5848 number of registered tea buyers. The total turnover of the Indian tea industry is in the vicinity of Rs. • Nine tea Auction centres.06 million. It is also a substantial foreign exchange earner and provides sizeable amount of revenue to the State and Central Exchequer.K. Tea is an essential item of domestic consumption and is the major beverage in India. Most of the sterling companies.

All India – 185.4 kg (14 oz) Switzerland Sweden 0.0 kg (71 oz) Iran 1.2 kg (7.75 kg (26 oz) India Pakistan 0.1 oz) 0.1 kg (3.0 kg (71 oz) Ireland 2.2 oz) .32 million This is a list of countries ordered by annual per capita consumption of tea.8 kg (28 oz) Australia 0.2 kg (42 oz) Morocco Egypt 1.3 kg (11 oz) Finland 0.1 kg (3.2 kg (7.1 oz) Denmark Peru 0. as of 2007 & 2010 Rank 1 2 2 4 5 6 7 7 9 10 10 12 13 13 15 15 17 17 17 20 20 20 23 23 23 23 23 23 29 29 31 Country Tea consumption Turkey 2.1 kg (39 oz) New Zealand 1 kg (35 oz) Poland 1 kg (35 oz) 0.5 oz) 0.5 oz) Italy Ethiopia 0.09 kg (3.6 kg (21 oz) China Chile 0.7 kg (25 oz) 0.1 oz) Bolivia Belgium 0.3 kg (11 oz) Austria Argentina 0.4 kg (14 oz) 0.1 oz) Canada 0.4 kg (14 oz) Norway 0.7 kg (25 oz) Germany 0.3 kg (11 oz) United States 0.1 oz) 0.6 kg (21 oz) 0.2007-08: South India – 75.1 oz) France 0.2 kg (7.2 kg (7.8 kg (28 oz) 0.1 kg (74 oz) United Kingdom 2.2 kg (7.9 kg (32 oz) Japan Netherlands 0.4 kg (49 oz) 1.17 million.2 kg (7.

according to the country’s first tea report launched by the China Social Science Academy Press. the European Union. while China’s share during the same period increased from 16 per cent to 19 per cent and Kenya’s from 19 to 22 per cent. China’s export was around 300 million kg including 230 million kg of green tea as against India’s 197 million kg. China’s major export markets are Morocco. In 2010. The major buyers of Indian tea are Iraq and CIS (21 per cent each). China’s exports. In 2005. the US and Canada (4 per cent). Japan and the US. the UK and Ireland (11 per cent). according to a study by the Indian Tea Association (ITA). Iran and the United Arab Emirates (13 per cent). China’s exports of flower tea and fermented tea produced in South-West Yunan province are showing a downward trend. Afghanistan (4 per cent). Pakistan (7 per cent). Poland and Australia (2 per cent each) and others (7 per cent). Germany and the Netherlands (3 per cent).India’s share in world tea exports declines 2% in 2005-09 Between 2005 and 2009. India’s share in world tea exports declined from 15 per cent to 13 per cent. China pipped India to become the world’s largest producer of tea. In 2009. will rise two per cent over 2009 figure. Kenya (4 per cent). according to official sources. entirely black tea. .

India had achieved 198 million kg tea exports in 2009.India's tea exports decline in 2010 Failing to meet the target of 200 million kg tea export set for 2010. Even.4 million kg in 2010 against 979 million kg in the year-ago period due to a drop in output in Assam. our exports are rising. According to data released by Tea Board. new entrants in the world export markets like. exports to Iran is also set to be 15 million kg. India's tea output declined by 1. . This time we are expecting to export about 40-45 million kg. In 2008. In 2010. "In Russia also. The fall in exports is indicative of its losing ground to other major producers like Sri Lanka for the orthodox variety and Kenya for CTC tea. exports of tea from India to Pakistan is on the rise and that too by a phenomenal margin. which produces more than half of country's total tea production due to adverse weather and pest attacks. Vietnam and Indonesia are giving Indian tea a run for the money. India registered exports of 20 million kg tea to Pakistan from just around 5-6 million kg a year-ago. Besides. Former Tea Board Chairman Basudeb Banerjee in November last year had said the Board has set 200 million kg export target for 2010. He said the production in the current year is likely to increase compared to last year." Patra said.3 million kg during the period in sync with dip in production.3 per cent to 966. shipments of the beverage from India actually declined by 2. India's tea exports went well passed 200 million kg.4 per cent to 193. Meanwhile.

36 Unit Price ( / Kg ) 167.26 162.84.23 81.189 5.44.903 70.74 165.477 90.77 114.95 274.63 146.66 96. but with rise in exports to Russia.252 Value ( Th.49 134.65 1188. Pakistan and Iran."Though exports have fallen in 2010.76.71.77 169.838 7.79 2595.373 197.21 140.18 1700.82 110.44. I think we will get good results in the current year.91 61.816 193. ) 154.51.79 106.72. Kgs) 9.26 997.68 669.93.20.84.97 98.94 1788.12 215.749 11.66.94.00.15 894.39 2785.678 19.26 161.74 Period Region North India December 2010* * South India All India North India December 2009 @ South India All India North India January to December 2010 * South India All India North India January to South India December 2009 @ All India April to December North India 2010 * South India .03 192.73 140.516 102.530 87." Patra added. ESTIMATED EXPORTS OF TEA FROM NORTH & SOUTH INDIA ESTIMATED EXPORTS OF TEA FROM NORTH & SOUTH INDIA Qty ( Th.293 110.560 14.049 69.20.

16 117. the decline in exports is also indicative of India losing ground to other major producers like Sri Lanka for orthodox variety and Kenya for CTC (Crush-Tear-Curl) tea. Tea Board of India today said it is hoping to achieve it this year on hopes of a better output.04 1489." Tea Board Deputy Chairman Roshni Sen said. Kazakhastan. "Our target for the current year is in the range of 200 million kg.32 144. according to an industry insider.38.41 165. Besides.All India North India April to December South India 2009 @ All India * Estimated 139.37 India likely to keep tea export target at 200 mn kg for 2011 Despite failing to reach the 200 million kg tea export target for the last two years. but only managed to dock 193. India would target these markets with high-end and value-added varieties. .301 90. Russia.81. was last year severely hampered by bad weather and pest attacks. Even. like Vietnam and Indonesia are giving Indian tea a run for the money. which contributes around 70 per cent of the North India's production and produces the premium varieties of the beverage.160 69. new entrants in the world export markets.19 812.79 2301. Tea production in Assam. said Sen.282 159. The last time the country had exported 200 million kg tea was in 2008. The Tea Board had aimed to achieve the same in 2010. Tea exports from the country stood at 198 million kg in 2009. it is the thumb mark for us. the Board would be focussing on the US. This year.29 million kg due to lower yield in Assam.98 @ Actual 133.85. Iran and Egypt to boost its exports.04.442 1858.

India exported 20 million kg tea to Pakistan from just around 5-6 million kg a year ago. Also. much like the past year. it would be treated with CTC variety.Indian Tea Association Joint Secretary Sujit Patra said India was expecting to ship about 45 million kg tea this year to Russia and around 15 million kg to Iran. . the tea board is expecting good demand for Indian tea from Pakistan. since the market there is price-sensitive. However. it said. In 2010.

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