Declining Tea Exports of India

Declining Tea Exports of India

News: Recently, the exports of tea from India registered a decline of around 14.4% in the first seven months (January-July) of 2021 as compared to the same period in 2020.

About Tea:
• Tea is a beverage made from the Camellia sinensis plant. It is the world’s most consumed drink, after water.
• It is believed that tea originated in northeast India, north Myanmar and southwest China, but the exact place where the plant first grew is not known. There is evidence that tea was consumed in China 5,000 years ago.
• Tea is a tropical and sub-tropical plant and grows well in hot and humid climates. The ideal temperature for its growth is 20°-30°C and temperatures above 35°C and below 10°C are harmful for the bush.
• It requires 150-300 cm annual rainfall which should be well distributed throughout the year.
• The most suitable soil for tea cultivation is slightly acidic soil (without calcium) with porous sub-soil which permits a free percolation of water.
• India is:
The largest consumer of tea in the world.
The second largest producer of tea in the world. (China is the largest producer.)
The fourth largest exporter of tea in the world.
• International Tea Dayis observed on 21st May every year after it was designated by the United Nations General Assembly in December 2019.

Present Scenario:
• Total exports during January to July of 2021 was 100.78 million kilograms as against 117.56 million kilograms in the same period of 2020.
• The CIS (Commonwealth of Independent States) block remained the largest importer of tea at 24.14 million kilograms, down from 30.53 million kilograms in the previous similar period.
• The only exceptions are USA and UAE where exports registered an increase this period of 2021.

Factors responsible:
• Exports to Iran, which was once a big buyer of Indian tea, was lower due to the sanctions by the U.S.
• The other prime reason is non-availability of shipping containers which have become very expensive during the Covid times.
• Due to the availability of low-cost varieties in the global market and amid trade restrictions in countries that have traditionally been strong importers.
• Indian exports have suffered in the last two-three years due to very low prices of Kenyan and Sri Lankan tea.
• Kenyan tea auction price average is much less than the Indian auction average.
• About 80% of it produced in India is sold for domestic consumption, as per a 2018 'Executive Summary of Study on Domestic Consumption of Tea' published by the Tea Board.
• Exports to Pakistan, a major market for Indian tea, have also stopped since the last three years following escalation of tension between the two countries.
• The coronavirus-induced economy has resulted in several commodities’ low production and imbalance mechanisms of the Indian economy. This has impacted exports of India’s tea along with other significant reasons. 

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