Improving Political Relations Double Pakistan Tea Imports from India

KOLKATA, India

Thawing political tensions between India and Pakistan will double the quantity of tea exports between the two countries.

Pakistan President Asif Ali Zardari’s official visit to India included a delegation from the Pakistan Tea Association (PTA) whose members this week signed a memorandum with the Indian Tea Association (ITA) to import 50 million kilos of tea by 2015. This is double the 24 million kg shipped last year. Trade has steadily risen from an all-time low of 1 million kg in 2001.

It has been five years since the groups last met. Trade was strained following eleven coordinated attacks in November 2008 in Mumbai in which 164 Indian civilians were killed and 304 wounded by militant Islamist extremists sheltered in Pakistan.

A report in the Economic Times noted the 13-member tea delegation led by PTA Chairman Mohammad Hanif Janoo met the ITA officials to discuss trade opportunities between the two countries. At a joint press conference Janoo said "We have looked at various opportunities on increasing tea imports from India. Pakistan is a 220 million kg market and our consumption is going up at the rate of 2 percent. Pakistan is looking at importing quality tea from India."

Pakistan imported 60 percent of its tea, or 135 million kg from Kenya in 2011, but that supply is less certain. Kenya has sustained a drought and is currently shipping exports from its dwindling surplus.  Production was down 8 million kg in February and 3.5 million kg in March. Significant volume arrives in Pakistan from Vietnam but the supply chain is greatly shortened, lowering costs, for trade between South India and Assam. An import duty of 10 percent further limits trade between the two countries. The PTA has asked the Pakistan government to ease this barrier.

"Kenyan prices have also gone up due to less availability. Many nations depend on Kenya for their tea requirements. Next to Kenyan tea, comes Assam tea. Therefore, we will look at Assam tea also for meeting our internal demand," Janoo told the Economic Times.

Pakistan pays about $3 per kilo for Indian tea. Janoo told The Business Line that Pakistan consumers are price sensitive and thus favor teas from South India and Assam but “good quality Dooars priced at $2.8 a kg could well compete with the Kenyan varieties averaging $3.20 or so,” according to C.S. Bedi, Chairman of ITA.

Bedi said he accepted an invitation to Pakistan to assess the market at a future undisclosed date.

Source: Economic Times, Hindu Business Line

CATEGORIES
News
Dan Bolton

About Dan Bolton

Dan Bolton edits STiR Tea & Coffee Industry International. He was formerly editor and publisher of World Tea News and former editor and publisher of Tea Magazine and former editor-in-chief of Specialty Coffee Retailer. He is a beverage retail consultant and frequent speaker at industry seminars and conferences. His work has appeared in many beverage publications. He was a newspaper reporter and editor for 20 years prior to his career in magazines. Dan is the founding editor of Natural Food magazine and has led six publishing ventures since 1995. He lives in Winnipeg, Canada.

COMMENT