KARACHI, July 2: Pakistan Tea Association (PTA) and Indian Tea Association (ITA) on Wednesday signed a Memorandum of Understanding (MoU) under which local traders and blenders would import a minimum 10 million kg of Indian tea in 2003-2004 “provided PTA is satisfied with the quality and confident that prices are competitive.”

Under the MoU, it was agreed that the Indian Tea Association would ensure that its members will supply suitable quality of tea at internationally competitive prices.

The MoU was signed by ITA chairman, Bharat Bajoria and chairman PTA, Saeed Ahmed Khawaja at a local hotel on Wednesday. The ITA would take appropriate steps to assist producers in India to facilitate tea exports to Pakistan. The PTA will take similar steps to provide assistance to the tea trade in Pakistan towards facilitation of imports of tea from India, it was agreed under the MoU.

It was also agreed that the PTA and ITA will exchange information on production, exports, imports and prices of tea, etc. Both the associations will facilitate regular visits of buyers and sellers between the two countries.

According to PTA chairman, Saeed Khawaja, ITA chief has assured the PTA that their members are ready to provide tea “no matter if they suffer losses.”

He said he had told Bharat Bajoria that the Bangladesh tea lands in Pakistan at the rate of Rs71 per kg, while Indian tea costs Rs85-86 per kg. “Our members will be happy if India producers provide tea at the same rate of Bangladesh,” he asked the ITA chief.

PTA chief said that MoU does not mean that the PTA members are now bound to import Indian tea. “We will buy tea if prices and quality are competitive,” he added. He recalled that in 2001, an MoU was signed between the two association under which Pakistan had to import 15 million kgs, but only 3.5 million kgs found way into the local markets.

To a query whether any business deal between PTA and ITA members had been struck, Saeed Khawaja said no business deal has been signed yet as this was more a goodwill mission. In the past, deals had been struck only after ascertaining the quality and prices of the samples sent by India.

“If India producers offer affordable rates and assure quality — we will definitely buy larger quantities,” he said adding that Indian side would send samples in one or two months.

He said Bharat Bajoria has also invited the PTA delegation to India in order to foster trade ties between the two countries.

The Indian delegation had arrived in Pakistan on June 29 after a gap of two years as part of its effort to boost sales of Indian tea to Pakistan.

Market watchers say that political tensions between the two countries in the past have not caused any harm to the import of tea from India as Pakistan has already been importing around three to 3.5m kgs per annum.

According to an analyst at Khadim Ali Shah Bukhari, Pakistan, third largest importer of the world, is now attracting quite an interest in the tea segment. Indians are looking for the Pakistani markets for various counts — defusing tension between the two countries, increasing trade volume and government’s decision to cut import duty on tea by five per cent. Indian team is trying to capture nine per cent market share.