45% surge in Kenyan imports leaves Assam tea planters in distress

Guwahati, Aug 26: A rise in production combined with a surge in imports has caused tea prices to plummet this year. Between January and June, tea imports from Kenya crossed 6.69 million kg, compared to 4.61 million kg last year an increase of 45 per cent.

According to data published by Kenya's Tea Board, last year the African country had exported 13.7 million kg of tea to India, which was an increase of 288 per cent over the previous year.

Tea production in upper Assam is also up by around 20 per cent this year. Prices have crashed due to this oversupply-both due to production and rising imports.

"At the Guwahati auctions, average price from April to August is lower by around Rs 20 compared to the corresponding period last year. Lower quality teas are very less in demand," Guwahati Tea Auction Buyers Association secretary Dinesh Bihani said.

However, better teas are still selling at reasonable level. "This year ex state sales are also subdued and there prices are also down," Bihani added.

Last year, extreme weather events had led to a crop loss, which shot up the prices by around Rs 52the best ever price realisation witnessed by the industry since the Covid pandemic. Average prices last year between April and October was around Rs 253, compared to Rs 200.08 in the previous year.

This year average prices at auction up to this week's sale stands at Rs 225.59.

Planters argue that there is enough ground to infer that a correlation exists between the increase of the quantum of imported tea to India and decline in prices

"There is also an apprehension that on one hand exporters are importing cheap teas duty-free, blending them with Indian teas, and exporting them as Indian-origin, misrepresenting the product and damaging the credibility of Indian tea exports and on the other hand, a large share of duty-free imported teas is entering the domestic market, evading the 100 per cent import duty and undercutting genuine producers with in-distinguishable, cheaper blends. In fact, there's no clear system to track how much was re-exported and how much ended up in the local market," Tea Association of India president Sandeep Singhania had said in a recent statement.

Total tea imports in 2024 surged by 82 per cent to 44.53 million kg, with Kenya and Nepal accounting for 74 per cent of the total.

A section within the industry also blames production of poor quality teas and lack of promotion to increase consumption for the subdued prices.