Lanka economic crisis boosts Indian orthodox tea exports

The economic crisis in Sri Lanka has come as a boon, as expected, for the Indian tea sector. Exports of Orthodox tea, which is loose-leaf tea, produced using traditional or orthodox methods such as plucking, withering, rolling, oxidation and drying, from India have increased by more than 22 per cent in the first six months of the calendar year. Normally, Sri Lanka is the largest supplier of orthodox tea in the global market. Sri Lanka accounts for about 50 per cent of global trade in orthodox teas. And Sri Lanka's top five markets are: Iraq, UAE, Russia, Turkey and Iran. Indian orthodox tea is now finding larger markets in these countries.

Going by the Tea Board India statistics, tea exports from India during January-June 2022 stood at 96.89 million kg, up by 10.43 million kg (mn kg) over the same period last year. Much of the increase was from the orthodox segment, whose exports rose by 8.92 mn kg to stand at 48.62 mn kg. The increase in exports of CTC tea, on the other hand, was just about 0.80 mn kg.

Sri Lanka, on its parts, has seen a drop of about 19 per cent in production, on an annual basis. If this deficit continues, then one can look at 60 mn kg of lower production in that country for the full year. Mind you that is the total orthodox production in North India.

The Tea Board of India has been quick to respond to the situation and understandably reaping the benefits from the shortfall in Sri Lanka. Sri Lanka. In fact, the Tea Board is planning to encourage more orthodox production by trying to incentivise it in its upcoming plans. Out of a total tea production of 1,344.40 mn kg in 2021-22, orthodox production was 113.07 mn kg.

This has come at a time when India has lined up plans to achieve exports of 240 million kg in 2022-2023 with a target of exporting 300 million kg by 2025. In 2021, India clocked exports of around 195.5 million kg, one of its lowest levels. The Tea Board has presented a draft Vision 2030 document to the Ministry of Commerce which sets out the course for the Tea Board in association with the industry. It also focuses on export-led growth for the industry.

Various stakeholders of Indian tea industry, particularly tea exporters, are extremely bullish that exports from India are expected to pick up further in the second and third quarters which will help meet the target of 240 mkg by the end of the year. Going by the current trend, orthodox will see heightened demand. Significantly, the major gains for India during January-June have come from UAE at about 9.1 mkg. Mind you that UAE is mainly a re-exporting hub and much of the teas goes to Iran and CIS countries. This trend is likely to continue for some time now, much to the pleasure of the Indian tea exporters. So, it's cuppa that cheers for the growers and exporters of Indian orthodox tea, at least for some more time now.