Drought in Kenya proves a blessing for South Indian tea

Industry expects to exploit overseas markets which are dependent on Kenyan tea

The drought in Kenya that hit the tea industry has given an unexpected boost to the South Indian tea industry. The industry is buoyant about the overseas markets, especially the UK and Pakistan, which are solely dependent on Kenyan tea for their domestic consumption.

Industry sources estimate a 25 per cent drop in the Kenyan tea production this year, owing to severe drought. Against a 328 million kilo production in 2005, the country estimates a 82 million kg drop this year.

"Kenya exports almost its entire produce to Pakistan and the UK. India can now utilise this opportunity to raise exports and gain markets in these countries which consume good CTC teas," an auctioneer told Business Standard. It is noteworthy that only Indian teas match the Kenyan quality, he added.

Due to the drought situation in Kenya, the demand has suddenly shot up and there is a huge mismatch between the demand and supply gap, particularly in the CTC varieties that have begun to trade dearer, according to a source in the Coimbatore auction centre.

The four consecutive auctions at the two centres in the region- Coimbatore and Coonoor- saw the entry of exporters in a big way. The support comes from the buyers even as the production has been affected by the frost in South India.

"In the last three sales, the price for all the varieties has gone up by Rs 5 - 10 and is expected to go up in the oncoming sales also, owing to the demand on the export front," according to Ullas Menon, secretary of the United Planters' Association of South India (Upasi).

After making inroads into the Pakistani market with its export level almost doubling, the South Indian tea industry is gearing up to make its beachhead presence in Egypt, another big consumer of Kenyan tea.