KOLKATA, Aug 21: India’s tea exports are likely to fall by around six per cent in 2003 to 186 million kg, mainly due to the collapse of the key Iraq market, the country’s largest planters’ body said on Thursday.

India exported 198 million kg (436.5 million lb) tea last year, driven by sales of 40.25 million kg to Iraq, a three-fold jump over 2001.

But overseas sales in the first half of this year fell 28 percent year on year to 57.15 million kg due to the Iraq war, the India Tea Association (ITA) said.

The ITA, which released its status paper on the “Indian Tea Scenario”, said the drop in exports to Iraq would be somewhat offset by a rise in sales to Pakistan and Britain.

“We expect exports to increase to Britain and Pakistan this year, which should offset some of the loss in Iraq,” Sujit Patra, Deputy Secretary of the ITA, told Reuters.

In June, an ITA team signed an agreement to triple Indian exports to Pakistan to 10 million kg by end-2003. Pakistan imports 130-140 million kg tea annually.

The tea body also said exports to Britain would rise 19 per cent to 25 million kg this year from 2002 as production from key competitor, Kenya, was expected to fall due to drought conditions in the tea-rich African nation.

The ITA has also forecast a nearly five per cent rise in domestic production this year to 864 million kg, after good monsoon rains in tea-growing regions.

“Since supply is likely to exceed domestic demand, the industry has to make all-out efforts to increase exports,” Mr Patra said.

Poor growth in domestic usage has forced the ITA to scale back its 2003 consumption forecast from 714 million kg to 697 million kg, which is a small rise of 1.8 per cent over 2002.—Reuters