Tea crisis looms in Pakistan as prices surge

Ahead of Ramazan, the price of black tea (loose) in Pakistan has swelled to Rs 1,600 per kg from Rs 1,100 in the last 15 days as around 250 containers are still stuck at the port that arrived from late December 2022 to early January, local media reported. A retailer said a leading brand has raised the price of 170-gram Danedar and Elaichi packs to Rs320 and Rs350 from Rs 290. The 900 and 420-gram packs now cost Rs 1,480 and Rs 720 as against Rs 1,350 and Rs 550. Other packers are set to follow suit, Dawn reported. Zeeshan Maqsood, Convener Standing Committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tea, said that imports are currently under crisis which may lead to huge shortages in March, Dawn reported. He said banks say they have instructions from the State Bank of Pakistan (SBP) to release documents on 180-day defer contracts or 180-day letters of credit (LCs). He added that the situation is getting worse because if anyone gets these containers released on 180-day deferred payment then how he would calculate the cost of imported tea as nobody knows what would be the dollar rate after six months on the interbank market, Dawn reported. Zeeshan, who is also an executive member of the Pakistan Tea Association (PTA), said the banks are not opening LCs saying they do not have any instructions from the SBP for new contracts.