Record tea crop in Kenya has given a tough competition to Indian tea in the global markets in the second half of the year. Indian tea has failed to maintain higher prices in the world market as Kenya is routing its higher produce in three key black tea markets –– Europe, Pakistan and Egypt.
Record tea crop in Kenya has given a tough competition to Indian tea in the global markets in the second half of the year. Indian tea has failed to maintain higher prices in the world market as Kenya is routing its higher produce in three key black tea markets –– Europe, Pakistan and Egypt.
Prices of Indian teas in the global market which was higher by 10% in the first half of 2018, compared with H1of 2017, has come down significantly in the second half. Industry executives feel that it will be difficult to cross last year’s export of 240.68 million kg this year because of Kenya’s stronghold in global markets.
Talking to ET, Azam Monem, director McLeod Russel India, said, “Kenyan crop is expected to be around 480-490 million kg this year against 430 million kg last year. There had been good rains in the African nation resulting in higher crop from July. This has given them the advantage of offering more tea to the black tea drinking nations.” Indian tea production in the first nine months of 2018 stands at 941.18 million kg which is almost at par with last year’s production for the same period.
Monem said exports may fall flat this year on two grounds – high production in Kenya and a temporary uncertainty created in the market after US imposed sanctions on Iran, a major orthodox tea market. Figures released by the Tea Board of India till September this year shows that India has exported 173.80 million kg which is almost similar to what the country had exported in the first nine months of 2017.
In January-September 2017, India had exported 173.52 million kg of teas. The uncertainty over Iran had prompted the orthodox tea producers to shift to CTC teas. “But with India getting conditional waiver from the US to buy Iranian oil after it re-imposed sanctions on the Persian Gulf nation, the rupeerial trade is going on. Since tea producers have shifted to CTC, they are not being able to take advantage of the current situation. That has also hurt exports. This has resulted in more CTC teas in the system and brought down prices in the world markets at a time when Kenya is offloading huge volumes,” explained Monem.
Prices of Indian teas in the global market which was higher by 10% in the first half of 2018, compared with H1of 2017, has come down significantly in the second half. Industry executives feel that it will be difficult to cross last year’s export of 240.68 million kg this year because of Kenya’s stronghold in global markets.
Talking to ET, Azam Monem, director McLeod Russel India, said, “Kenyan crop is expected to be around 480-490 million kg this year against 430 million kg last year. There had been good rains in the African nation resulting in higher crop from July. This has given them the advantage of offering more tea to the black tea drinking nations.” Indian tea production in the first nine months of 2018 stands at 941.18 million kg which is almost at par with last year’s production for the same period.
Monem said exports may fall flat this year on two grounds – high production in Kenya and a temporary uncertainty created in the market after US imposed sanctions on Iran, a major orthodox tea market. Figures released by the Tea Board of India till September this year shows that India has exported 173.80 million kg which is almost similar to what the country had exported in the first nine months of 2017.
In January-September 2017, India had exported 173.52 million kg of teas. The uncertainty over Iran had prompted the orthodox tea producers to shift to CTC teas. “But with India getting conditional waiver from the US to buy Iranian oil after it re-imposed sanctions on the Persian Gulf nation, the rupeerial trade is going on. Since tea producers have shifted to CTC, they are not being able to take advantage of the current situation. That has also hurt exports. This has resulted in more CTC teas in the system and brought down prices in the world markets at a time when Kenya is offloading huge volumes,” explained Monem.