No more Indian tea and crumpets

Despite producing 25 per cent of the world’s tea, India’s share in global tea exports has dropped significantly.

Despite producing 25 per cent of the world’s tea, India’s share in global tea exports has dropped significantly. A recent study by rating agency ICRA says India, whose share in world exports stood at 19 per cent in 1990, now accounts for only 10 per cent of global tea exports. An appreciating rupee and competition from Kenya saw India’s exports of the leaf drop nearly 29 per cent in FY’08

28.7 per centThe drop in India’s tea exports

2.6 per centAverage annual decline in tea exports between 1998 and 2007

102.6 mn kgDecrease in tea exports, from 218.2 mn kg in FY’07 to 115.6 mn kg in FY’08

Rs 515 croreReduction in export revenue, from Rs 2,045 crore in FY’07 to Rs 1,530 crore in FY’08

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Rs 2Drop in tea export price realization, from Rs 108 per kg in 1998-99 to Rs 106 in 2006-07

What cracked the teapot?

• Sharp decline in realizations at Kolkata and world auctions in the January-March 2007 period coupled with rupee appreciation dented prospects last fiscal

• Collapse of major global markets such as Iraq and rise in production in Kenya and Turkey

•Switchover of major buying countries like the UK from India to their preferred supplier nation—Kenya

Leafing through India’s tea story

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India’s tea exports accounted for 40 per cent of domestic production in the early 1980s. This declined to 20 per cent in 1994. Though the proportion of exports reached 24 per cent of domestic output in 2003, it fell to 17 per cent in 2007