KARACHI, June 30: India is willing to sell 10 million kgs of tea to Pakistan by offering competitive prices in the next one year as compared to export of 3-3.5 million kgs in 2002, but Pakistani tea importers have some reservations on price and quality of Indian tea.

India Tea Association (ITA) chairman Bharat Bajoria, who is leading a 14-member tea delegation to Pakistan, held a closed door meeting with members of the Pakistan Tea Association (PTA) at a local hotel here on Monday. The Indian team is convincing Pakistani side to import larger quantities of tea at affordable rates.

PTA chairman Saeed Ahmed Khawaja told Dawn after the meeting the Indian delegation chief had said that his members were ready to provide tea at rates that are suitable for the Pakistani importers.

He said Bharat Bajoria was very much interested in signing a memorandum of understanding (MoU) on tea trade on Monday, but it could not be signed. “We will sign the MoU after discussing it with the PTA members and taking them into confidence. Otherwise, signing of the MoU will have no benefit,” he informed the ITA chief.

“I have told him that there is no need to sign the MoU as there is no restriction on tea imports from India. “I have asked the Indian side to first send samples in the next one or two months with prices so that our members could work out the possibility of importing Indian tea,” he said.

It could not be known as to how much price cut has been offered by the Indian side in the meeting.

“Our members will import tea only when it is workable in both quality and price terms. There is no harm in importing tea when prices and quality are matched simultaneously,” Mr Saeed said attributing the reasons of non-popularity of Indian tea in Pakistan.

He said prices of Indian tea had generally been high because of the strong internal demand. About 650 million kgs out of 810 million kgs are consumed in India. Pakistan had purchased Indian tea whenever prices were lower and competitive, which had resulted in erratic imports of tea from India. Mr Saeed said that in the past Russia was a big buyer of Indian tea. He informed the ITA chief that things had changed now and the quality of Indian tea had improved that might satisfy the Pakistani palate. “Actually India wants to triple its tea exports to Pakistan that is why they are ready to offer the commodity at competitive rates as compared to Kenya,” he said.

“Indian exporters have to convince Pakistani buyer and consumer of the improvement made in the quality of Indian tea,” he informed Bharat Bajoria, adding frequent visits between the two countries would be helpful in increasing the volume of business.

India is the third largest producer of tea, while Pakistan is the third largest consumer of tea in the world. Pakistan imports 65 per cent of tea from African countries, out of its total tea imports of 140,000 tons per annum. Pakistani tea market comprises of 45 per cent of loose tea and 55 per cent of packaged tea.

Commercial importers have already been importing tea from South India at the rate ranging between 85-90 cents per kg (C&F) Karachi, while blenders mainly Unilever imports tea from Assam in India at the rate hovering between $1.40 and $1.70 per kg depending on the quality for blending purpose.

“Indians are really taking the Pakistani markets very seriously this time,” said former PTA chairman Mohammad Hanif Janoo. “Indians intend to export 10 million kgs or more of tea in the 2003-04 and are trying to offer competitive rates this time,” he said, adding that a lot depends on the rate of Indian tea.

Besides apprehensions about success of Indian tea in Pakistan, there are slight possibilities of increasing tea imports from India in the current year as Lakson Group has already entered into a joint venture agreement with Tata Group to set up a tea blending plant at Hub, Balochistan, to market Tetley tea in the last quarter of this year.

The new upcoming blender had already said that it might use some quantity of Indian tea for blending purpose, besides importing bulk of tea from Kenya and Sri Lanka.