The Telegraph
Since 1st March, 1999
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Shadow on tea exports

New Delhi, March 25: War clouds have cast their shadows on Indian tea and foodgrain exports.

Iraq, which acounts for about 20 per cent of India’s tea exports, is not expected to place any significant orders in the coming fiscal. Consignments to the Gulf, especially to Iran where high value orthodox tea normally goes, are stuck due to the war.

Ajai Kumar Atal, managing director, J. Thomas & Company said, “Tea exports to Iraq in particular and the Gulf region in general have definitely been disrupted.”

“Iraq came under the United Nation's scheme of food for oil programme, which has been halted now,” Atal said.

The south Indian tea industry will be most affected as it is more dependent on Iraq for exports,” he said. J. Thomas is the largest tea brokerage company in India.

Over-supply to other markets and the domestic market is expected to bring tea prices down to an all-time low, hitting profitability of tea firms badly.

“Tea exports to Iraq were picking up very well last year and this year we expected to do substantially more, but now that will be affected and also future orders for India will get delayed,” he said. Owing to shipping problem, exports to Iran and several gulf regions too have been hit, he added.

Industry analysts said in the year ending March 2003, India will have exported about 193 million kgs of tea.

Out of this some 40 million kgs were to Iraq. Next year, total tea exports is expected to be about 200 million kgs, out of which 45 million kgs was expected to be picked up by Iraq.

“We were getting good queries from Iraq. But now all this will be history,” said Shovan Sircar, a tea industry analyst. Exports to Iraq mainly comprise orthodox tea and CTC leaves.

Sircar said, “High value orthodox tea shipments to Iran have also been affected.” These shipments have been halted and if delayed beyond a point, the tea may not be picked up by the buyers, he said.

Inder Singhee, president of the Calcutta-based Tea Packeteer's Association of India said that at the time the war broke out, a lot of tea consignments were in transit. These came under food for oil programme, for which UN inspectors used to release payment.

As for grain, basmati has taken the worst beating. Exports of basmati rice to Kuwait has come to a standstill, according to industry sources. Quite a few shipments of wheat to Iraq were anchored at Dubai. Rice shipments to the west Asian nations have been stopped in the past four to five days.

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