Rupee rise hurts tea exports

July 29, 2007
Tea exports may fail to meet the 210-million-kg target because of the rising rupee and payment problems in Iraq.

"Bulk of our exports are dollar denominated. It remains to be seen how our exports fare this year. Though our gross exports, which include re-exports, increased last year, net exports remained the same at 185 million kg," said Jairam Ramesh, minister of state for commerce and industry, while speaking at the AGM of the Indian Tea Association.

Between January to June, exports dropped by 15 million kg because of the erratic weather. "We have to wait and watch to see whether we will be able to make up for this loss. Most of our markets such as Pakistan, Egypt and Iran are price-sensitive," said Basudeb Banerjee, chairman of the Tea Board.

Tata Tea and its subsidiary Tata Coffee are also planning to set up a separate marketing cell in partnership with international agencies to promote Indian coffee and tea brands in Russia, Ramesh said. India exports about 32 million kg of tea to Russia.

"Tata Coffee is the largest exporter of coffee in Russia and most of our exports are business-to-business and are not brand-based," said Percy Siganporia, managing director of Tata Tea.

Bangladesh trade

The government is likely to lift its restriction on foreign investment from Bangladesh.

In the last fiscal, Indian exports to Bangladesh dipped slightly to $1.7 billion and China took over as the largest exporter.