India’s tea exports to major markets in Europe and Japan have plummeted amid increasing tea prices and a resurgent Rupee that has continued to appreciate in the last couple of weeks. Similarly, recession fears coupled with rising inflation have forced tea buyers in Europe and Japan to be cautious about purchasing tea at astronomical prices.
But despite prices for good quality Indian tea soaring by 40% to 50% this year, exporters continue to see more inquiries from emerging markets in the middle east, particularly from Saudi Arabia, Turkey, and Iraq.
Speaking on dwindling tea exports to Europe and Japan, the chairman of the Indian Tea Exporters Association, Anshuman Kanoria, stated that traditional tea markets in Japan and the EU are cutting down on their demand for Indian tea because of their unwillingness to pay higher prices. More so, the Japanese Yen and British Pound have trailed the rupee for some time now. All these have impacted tea exports to Japan and the UK.
Data released by the Tea Board shows that India’s tea export to Japan shrunk by 10.71% within the last six months. Similarly, tea exports to Germany and the UK fell by 10.33% and 2.46%, respectively.
India’s tea exports outlook
While Indian tea exports continue to dwindle, especially to traditional markets in Europe and Japan, authorities are waiting to get a better picture with export figures for June-August due in a couple of weeks.
Although the demand for Indian tea is suffering set back in traditional markets owing to rising prices, there has been increasing demand from newer markets for Indian orthodox tea, especially in middle eastern countries like Iraq and Saudi Arabia, which aren’t deterred by the soaring prices of Indian tea.
According to the director of Asian Tea and Exports, Mohit Agarwal, India’s orthodox tea market is booming, especially with increasing demand from Iraq and Saudi Arabia. He expects demand from traditional tea markets in Iraq and UAE to bring in an estimated 54 million KG in tea exports. He also lauded the government for its support in driving tea prices down, especially with the implementation of ₹10 per kg subsidies for orthodox teas.
Indian tea production has continued to skyrocket, with the country producing a whopping 100 to 200 million kg of tea annually. Even with the soaring prices of Indian tea, exporters foresee exports increasing to 225 million by the end of the year, which should be more than the 195 million kg exported last year.