Pakistani tea traders expressed their intention to double imports from India to 50 million kg (mkg) in next three years. Pakistan is the second largest CTC tea market after India.
A memorandum of understanding in this regard was entered between the top officials of Pakistani Tea Association (PTA) and the producers lobby of Indian Tea Association in Kolkata today.
Pakistan currently imports 24 mkg of India tea, including 21 mkg of South Indian varieties. Though the imports have increased significantly in the last decade from as low as 3.5 mkg in 2001; the unit price of such imports is much lower when compared to the Kenyan teas sold in Pakistan.
According to ITA, as in 2011, Pakistan imported 64 mkg of Kenyan tea at $3.18 a kg. In comparison, the average price of Indian imports was $1.39 a kg. Both the imports, however, attract same rate of duties.
Interestingly, while officially Pakistan imported a total of 122 mkg of tea in 2011; according to the PTA Chairman, Mr Mohammad Hanif Janoo, the country consumed nearly 220 mkg during the year.
ITA officials point out that bulk of the gap is filled by smuggled Indian tea. Mr Janoo also admits to the problem. “We have requested the government to lower import duty due to smuggling...” he told newspersons on Tuesday.
On the future consumption patterns of Indian tea, Mr Janoo indicated that South Indian varieties will be on top on demand chart. However, with Kenyan production reaching a plateau, he expected North India may emerge as a future sourcing point.
ITA Chairman, Mr C.S. Bedi, hoped that the small tea growers from North India may offer a value for money sourcing option to Pakistan.