KARACHI: Packers reduced the price of tea by Rs140-150 per kg in view of the declining rates in the world markets, particularly in Kenya — the biggest producer.
Retailers said Tapal Danedar 100 gram pack now costs Rs78 as compared to Rs88 while Tapal Family Mixture 100g pack now sells at Rs70 as compared to Rs84. The 190g Danedar and Family Mixture packs are now available at Rs140 and Rs130 as compared to Rs174 and Rs164, respectively. Lipton 190g pack now sells at Rs150 as against its previous rate of Rs192.
Consumers witnessed an increase of Rs60-125 per kg in tea prices in 2015 owing to the increase in Kenyan tea price which went from $3-3.5 to over $4 per kg.
Following the reduction in prices, good quality Kenyan tea rate has plunged back to $3-3.20 per kg in the last few months, a leading packer said.
Pakistan Tea Association (PTA)Chairman Mohammad Shakeel Jan said better crop in Kenya resulted in a price decline of 10-15 per cent in the last few months, which was now passed on to the consumers.
Besides, packers and blenders imported high quality tea due to lower prices so that consumers could get best aroma and taste, he added.
Moderate and scattered rainfall in growing areas pushed up Kenyan tea production to an all-time high of 50.30 million kg in January 2016 as compared to 41.65m kg recorded in January 2015.
Pakistan was a leading export destination for Kenyan tea in January 2016, with a shipment of 11.02m kg out of the 42.2m kg tea exported to over 40 countries by Kenya.
Packers and traders import 70pc of tea from Kenya to blend it with tea imported from 20 other countries. Kenya produces various varieties of tea with prices starting from $1.5 to over $4 per kg.
Shakeel said Pakistan’s annual tea consumption is estimated to be around 220,000-235,000 tonnes, of which 150,000 tonnes come from official channel and the rest from illegal channels.
However, the government efforts have resulted in curbing tea smuggling via the Afghan Transit Trade. Smuggling can easily be lowered further if the government brings down cumulative taxes and duties which are currently 45pc and encourage smuggling.
“Tea should be deleted from the luxury items list and be included in basic items. This will automatically remove or drastically lower taxes and duties on imports,” he said.
According to Pakistan Bureau of Statistics, tea imports have showed a rising trend since 2013-14. Black tea imports rose to 108,421 tonnes (valuing $326m) in July-January 2015-16 as compared to 92,598 tonnes ($197m) in the same period last year.
In 2014-15, tea imports jumped to 152,243 tonnes worth $340m as against 133,145 tonnes costing $300m in 2013-14.
Published in Dawn, March 19th, 2016