The tea industry is reviving a decline in exports to the tune of 30-40 million kg this year as compared to 2020, due to the availability of low-cost varieties in the global market and amid the trade restrictions in countries that have traditionally been strong importers. The corona virus-induced economic downturn in the world is also a factor for falling shipments. As per Tea Board India data, for the period between January to March 2021, exports fell by 13.23 % as against the corresponding period a year ago, and by 29.03 % as compared to 2019.
In 2021, altogether 45.86 million kg tea was exported from India between January to March. 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 since the last three years.While the tea export share of South India fell by 5.41 % in 2021 between January and March as compared to the same period in 2020, the decline was 25.85 % compared to 2019. In case of exports from North India, the figure for the three-month period was lower by 17.83 % as against 2020 and 31.04 % as compared to 2019.
Indian exports have suffered in the last two-three years due to very low prices of Kenyan and Sri Lankan tea. The Kenyan tea auction price average is below $2 dollars per kg, which is much lesser than our auction average said by Dinesh Bihani, secretary, Guwahati Tea Auction Buyers Association (GTABA). He also added that the Kenyan tea is available for $1.8 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. There is very limited domestic consumption demand of the beverage in Kenya and Sri Lanka, which means that more tea is available and targeted for export.
As per a 2018, 'Executive Summary of Study on Domestic Consumption of Tea' published by the Tea Board ,about 80 % of it is produced in India and is sold for domestic consumption. Exports to Pakistan, which is a major market for Indian tea, have also stopped since the last three years following escalation of tension between the two countries. The US sanctions against Iran is also 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 India data.
Domestic consumption of tea is also expected to have gone down since the onset of the pandemic in 2020 in the out-of-home sector (tea sold in railway stations, bus depots and cafeterias), Bihani said. The global economy is going through a crisis due to the COVID-19 lockdown and restrictions, which have led to further global decline in demand for tea.