India Aggressively Expands Orthodox Tea Exports

KOLKATA, West Bengal

Chamraj Nilgiries, India

China and India, the two largest tea producing countries, export only modest quantities compared to smaller producers such as Kenya and Sri Lanka.

Last year, China exported 328.69 million kilos. Kenya, the world’s largest tea exporter, shipped 480.33 million kilos (95% of total production).

India exported 222.45 million kilos, which is only a sixth of the tea grown there. Most of the exported tea is lower grade for blending. Only a small portion is processed as full-leaf orthodox.

The Tea Board of India is seeking new markets with a strategy that involves government support in negotiating free trade agreements with countries, followed by official trade delegations eager to dislodge existing suppliers. The strategy appears to be working.

In the first four months of 2017, India exported 73 million kilograms of tea compared with 69 million kilos the previous year.

Chamraj Nilgiries, India

Chile was settled largely by Europeans and is one of the top tea drinking nations in the world. Residents there spend $18 per person on tea each year. Chile relies on Argentina to supply its commodity tea and on Sri Lanka to supply its orthodox grades.

“Chile is some 10 million kilograms tea market and we are standing at nil,” India Tea Board Chairman Prabhat Bezboruah told The Economic Times of India. Chile offers huge potential, especially for premium tea, he said. North America is even more enticing, says Bezboruah.

The United States is a 200-million-kilogram tea market. India currently supplies 10 million kilos. Trade delegates on a recent visit to New York met with Tea Association of the U.S.A. The association estimates U.S. consumption at 84 billion servings in 2016. Gains have been steady for more than two decades. Argentina remains the largest supplier of tea to North America by far, but produces little specialty tea.

Bezboruah said India experienced a good harvest and while most of the tea grown there is for domestic consumption, growers are producing a lot more specialty tea. Now is the ideal time to promote third-party certified sustainable and organic teas as well as greater variety such as white tea and green teas.

In recent years, Russia, the largest orthodox tea buyer of India tea at $100 million per year, is importing less tea. Iran is the second largest importer of tea from India followed by the United Kingdom.

Bezboruah told Business World India that the U.S. currently imports 14 million kg of tea. The aim is to nearly double that in five years, he said.

Source: Business World India, The Economic Times