Mumbai: Indian tea exporters fear that there will be a drop in export volume in the current year due to higher prices available in the domestic market, particularly of the CTC variety.
The exporters also complained about the lack of availability of shipping containers due to fall in imports which has also led to a steep rise in freight rates.
Chairman of Indian Tea Exporters Association (ITEA) Anshuman Kanoria said that exports last year was around 252 million kilograms as per Tea Board data.
But this year we are fearing that the export volume will dip to 180 million to 185 million kilograms as offtake of orthodox tea by Iran had declined and the CTC variety is not being able to compete with Kenya and Africa due to high ruling domestic prices in India, he said.
Crush, tear, curl (CTC) is a method of processing black tea in which the leaves are passed through a series of cylindrical rollers with hundreds of sharp teeth that crush, tear, and curl the tea into small, hard pellets.
Kanoria said that Iran is the largest importer of orthodox variety from India which was 55 million kilograms last year.
But this volume of exports to Iran is going to be down due to some payment problems with that country. This year exports to Iran will be around 30 million to 35 million kilograms. We have apprised the commerce ministry of the problem, Kanoria added.
He said that CTC exports have been badly hit due to high domestic prices. There has been a good CTC crop in Kenya and Africa this year and so the prices have softened. These countries are making inroads with CTC tea in the export market as prices are low compared to India, he said.
The other problem the tea exporters are facing are lack of shipping containers, he said.
Since imports have come down, availability of shipping containers have declined at the ports. Due to this, freight charges have increased by a minimum of 50 per cent and this is eroding away the competitiveness of Indian tea in the export markets, he added.
Kanoria said that as export markets are shrinking this year, it will be difficult to regain them when things become normal next year.
According to him, tea prices this year has hit a high due to crop shortfall caused by prolonged closure of the gardens due to the pandemic.