Indian tea lying cold: Due to Russia-Ukraine war, exports are expected to decrease, the country is not able to take advantage of the situation in Sri Lanka
The heat of the Russo-Ukraine war is being felt all over the world. Due to this, the prices of crude oil are skyrocketing in the international market and inflation is increasing all over the world. India is incurring huge losses on another front due to the war. India’s tea exports are weakening due to the war and there has been a decline in tea exports to Russia-East European countries. This may force tea growers to reduce production, due to which unemployment may increase among tea workers. Due to the internal circumstances of Sri Lanka and China, there may be a cut of 80 million kg in tea trade from these countries, but India is not in a position to take advantage of this situation. The reason for this is believed to be the US sanctions on Russia.
In fact, Russia is one of the largest importers of tea from India. There the hand-crafted tea of India is very much liked. Similarly, in Eastern Europe, the traditional tea of India is very much liked. At the same time, due to the awareness of the people in the wellness category, there has been a significant increase in the consumption of tea of this category. But due to US sanctions on Russia, tea exports to Russia have come down, and due to war, due to increased inflation in European countries, tea exports there have also weakened. Market experts believe that this may harm India.
No advantage of Sri Lanka-China situation
Harikishan Singh, CEO of tea producer Tikri India, told Amar Ujala that Sri Lankan tea is loved all over the world, but due to its internal circumstances, it is unable to export tea at the moment. Similarly, China is also a big player in the world in terms of tea production, but due to the serious situation of Corona, its tea exports have also come down. It is estimated that in 2022-23, tea exports from Sri Lanka and China may be cut by about 80 million kg.
According to Harikishan Singh, under normal circumstances, any tea producing country can take advantage of this situation, but due to the time taken in tea production and heavy human labor, it is not possible to increase its production suddenly. Therefore, India is not able to take advantage of this changed situation. Tea companies are also not inclined to increase investment suddenly as this gives the possibility of getting profits in a limited time, while exports are more likely to return to normalcy as soon as the situation normalizes in neighboring countries. Due to this, no company is inclined to make huge investments in the short run.
Why Exporters Disappointed
According to Prabir Kumar Bhattacharjee, general secretary, Tea Association of India, the production of traditional tea involves huge investment and is expensive. Whereas popular tea is made through machines which at present accounts for about 83 percent of the total domestic production. The cost of production of traditional tea is about 20 times higher than that of production by machines. Therefore, his choice is limited to a particular class of people. Most of this class of tea is exported abroad. But due to inflation in the market, its consumption is coming down, due to which there is an atmosphere of despair among the tea growers.
India’s position
According to the data of Tea Board of India, the country comes second in the world in terms of tea production. The country accounts for about 10 percent of the total tea trade in the world and is among the top five tea exporting countries. Due to environmental reasons, tea from India is considered to be of the best quality in the world and is sold at high rates. India is also one of the largest consumers of tea and spends almost 80 per cent of its production on meeting its own needs. In 2020-21, 1283 million tonnes of tea was produced in the country, while in 2019-20 this quantity had reached 136 million kg, which is a record till date.
