KARACHI: Pakistan is set to double the quota of tea imports from India in the current year. A memorandum of understanding (MoU) to this effect was signed between the Tea Imports Associations of Pakistan and India.

Under the agreement tea supply from India to Pakistan in the current year will go up by more than twice in quantity to seven to eight million kilograms.

Rama Shankar Jhawar, the chairman of the visiting Indian Tea Association [ITA] delegation, offered to further push up tea supply from his country to Pakistan up to 15 to 20 million kilograms from 2002 at "affordable prices".

However, the MoU signed between the tea associations of neither the two countries nor any of their officials informed about the price on which Indian tea being offered.

PTA Chairman Asghar Ali pointed out to Indian tea merchants that Pakistani consumers have some reservations on "higher prices and quality of Indian tea".

He added that this was the reason Indian tea imports haven't increased in the past few years. UN

Friday, February 9, 2001 The Indian Express

Prospects Appear bring for a sustainable tea trade between India and Pakistan. While India is the largest tea producer to the world, Pakistan is the biggest consumer of tea outside India.

The two tea associations of the neighboring countries are working on the details of a memorandum of understanding (MoU), which is expected to be signed in a day or two. ITA has expressed a desire to cater to at least 10 per cent of the total Tea imports into Pakistan. Pakistan’s total import is around 110-115 million kg, mostly the CTC variety.

That the intentions are serious on both sides was amply evident in the substantially large turnout of the key buyers at a meeting with the visiting Indian tea delegation in Karachi on Monday, which is being celebrated as Kashmir Day throughout Pakistan. The city wore a deserted look with virtually all business activity ground to a complete halt.

The Monday meeting between the Indian delegation and the tea buyers in Karachi could well be a significant breakthrough in the trade relations between the two nations, at loggerheads over the vexed issue of Kashmir for decades now.

The Indian delegation, led by Mr. R.S. Jhawar, president ITA, the first ever high-powered trade body sans government officials to visit Pakistan, has been received well by the business community in Karachi. “I think this has sent the right signals to us,” Mr. Asghar Ali, Chairman Pakistan Tea Association, said.

A number of buyers also echoed similar sentiments. They also felt that such trade bodies without governmental interference and protocol gives the right focus to the real issue, which is trade and commerce. “We are happy that the Indian government has reposed so much faith in the business community,” said one of the buyers.

Even as some hard discussions are expected throughout the day, it is increasingly evident that Pakistan is an extremely price conscious market. The general taste is also towards brighter liquoring teas, something that Kenya seems to have developed rather successfully. Little wonder therefore, that Kenya supplies to approximately 80 per cent of Pakistan’s requirement. But certainly the road is not closed as far as India is concerned.

The good news is that Indian tea manufacturers have realized the virtues of quality and engaging on long-term relationships – the two crucial elements for extending trading relations with Pakistan.

Unlike the Indian market, which is fast being swamped by other beverages like soft and aerated drinks, people in Pakistan love their cup of tea. “Tea is a passion among people here. We talk tea, we talk tea, we walk tea and we sleep tea,” said another buyer.

However, entering markets in Pakistan is easier said than done. That is because each region has its own taste – from leaf to fannings to CTCs to hard liquoring dust – the last named being the favorite among the frontier states. The best for Indian producers may be in offering fannings or dust grades.

Thursday, February 8, 2001 The Economic Times

Indian tea exporters, especially from the South, are likely to suffer a major setback as Russia, to which 50 per cent of the tea was exported, has withdrawn a concession in the area of Value Added Tax (VAT).

Giving this information to newsmen here, United Planters' Association of South India (UPASI) president E K Joseph said the Russian Government, which had been allowing importers to pay the 20 per cent VAT at sales point which proved extremely beneficial, withdrew the concession from January 1 as the importers started evading payment of VAT at sales point.

He said following this, there had been a steep fall in the export to Russia last month and the position was likely to worsen in the coming months.

There has also been a slide in tea export to the Middle East countries because of the poor quality of tea imported by the country from third world countries, which is blended and exported as Indian tea.

Joseph said the brand equity of Indian tea, painstakingly built over the last 150 years, was fast eroding due to the poor quality of tea imported from third world countries.

As one such consignment of three million kg of tea was found to be unfit for consumption, the Libyan Government had imposed a ban on Indian tea. Following this India had lost the market to Sri Lanka, he added.

Pointing to the poor quality control and certification systems in the country, UPASI Tea Committee Chairman N Dharmaraj said in order to control import trade in tea, the Centre should impose a higher import tariff up to the level of bound rate on all tea, whether for domestic consumption or re-export.

The Centre should also enforce the Prevention of Food Adulteration (PFA) Act, he added.

Dharmaraj suggested that the duty drawback on import duty could be granted at the point of re-export, instead of allowing duty-free imports.

He said when Indian tea was blended with foreign tea for re-export, it should not be allowed to be exported as Indian tea. The blend percentage should be clearly mentioned in the consignment.

To a question, Dharmaraj said the UPASI was opposed to the Sri Lankan Government importing Indian tea for re-exporting to India.

However, UPASI was not opposed to importing 15 million kg of tea from Sri Lanka under the bilateral Free Trade Agreement, he added.

He urged the Centre to change its policy so that the Indian Tea became competitive. As of now, a quality drive was going on and exporters would tap the markets in the Middle East, the United Kingdom and the USA.

Friday, February 9, 2001