Guwahati, Feb 26: The tea industry in India is very wary of a prolonged war between Russian and Ukraine and resultant instability in the region as this will jeopardise Indian tea export to that region.
Russia is the largest export destination of Indian tea and CIS countries are fond of Indian Tea. Hence it is a very important market for the tea industry.
“If we lose this market then the prices of Teas will further fall as there is a surplus of Tea in the domestic market,” says Dinesh Bihani, Secretary Guwahati Tea Auction Buyers Association (GTABA).
India’s tea exports to total CIS stood at 40.17 million kg (mkg), valued at around ₹744 crores during the period January-November 2021, according to statistics available on the website of the Tea Board of India. Of this, exports to Russian Federation stood at 30.89 mkg, estimated at ₹558 crores, accounting for nearly 77 per cent of the total exports to the CIS. The total export to Ukraine during the period was at 1.6 mkg (valued at around ₹30 crore); Kazakhstan 6.25 mkg (₹127 crore), while other CIS stood at 1.43 mkg (₹29 crore).
Exports during the same period (January -November 2020) last year stood at 46.39 mkg valued at around ₹823 crores.
It is to be noted that the country’s tea exports during calendar year 2021 have been impacted due to the lack of clarity over payment mechanism with Iran and the higher prices of Indian CTC (crush-tear-curl) tea compared to the Kenya counterpart. While actual figures are still not available, estimates suggest that tea exports from India are likely to be lower by around 12-13 per cent at close to 180 million kg (mkg) during calendar year 2021 against 207.58 mkg in 2020.
“If the war is going on for a long time and more sanctions are imposed by NATO European countries then it will be very difficult for the Indian economy specially for the Tea Sector,” Bihani said.