Tea consumption in Pakistan is likely to be affected by a considerable decrease in Kenya’s output because of excessively dry weather in that country, importers and packers told Business Recorder on Friday. Price of Kenya tea varieties are rising in the international market on the back of an acute shortage of rainfall in Kenya which is affecting its tea yield in the current season.
Packers and blenders said that Kenyan tea prices increased by nearly $0.5 per kilogramme in the past two months, with current average price of $3.5 per kg. Pakistan imports tea from 21 countries and a major portion comes from Kenya. Sources said that Kenya lost tea planted over a vast area because of adverse weather conditions. According to import statistics shared by Pakistan Tea Association (PTA), the country imported 64.93 million kilogrammes of tea from Kenya between July 2011 and June 2012 against an average price of Rs 264.77 per kg, but prices surged to Rs 329.75 per kg over the past two months.
Importers, who claimed that they had resisted raising the price of the commodity, said that depreciation of rupee-dollar parity was another factor which has hit the traders hard. Pakistan imported 48.4 million kg of tea from Kenya in 2008-2009 and 58.03 million kg in 2009-2010 and nearly 70 million kg in 2010-2011.
Chairman of Pakistan Tea Association Mohammad Hanif Janoo said that the country’s total tea consumption was nearly 230 million kgs, of which 130 million kgs was imported from various countries, while 100 million kgs was smuggled into the country via Afghan Transit Trade. He said that a cut in General Sales Tax (GST) rate would have a positive impact on the industry, adding that it would also help curb the incidence of smuggling.
Statistics showed that India was second major country from where Pakistan imported tea: imports from India constitute 21.06 percent of total tea import. Data also showed that tea imports have increased by 200 percent between July 2008 and July 2012.
According to Hanif Janoo, prices of Indian tea varieties were much lower than Kenyan varieties, adding that tea import from India had increased because of rising domestic inflation. In 2011-2012, the country imported most of green tea from four countries of which Vietnam took the lion’s share with 71.08 percent followed by China and Indonesia having 21.73 percent, 3 percent share, respectively.