India’s Winter Tea Exports May Be Hit by New Covid Variant – ‘Omicron’

The now-spreading Omicron variant of Coronavirus is causing a new challenge and concern to India’s winter tea exports. Various stages of lockdown and closure of entry for foreigners and foreign goods in many countries is an added threat to the problem. 

“Although it’s too early to gauge the impact of Omicron on India’s tea shipments, we are concerned that Christmas markets are being closed in some European countries for fear of the spread of coronavirus in any variant form. Over a dozen countries have taken precautionary measures to close borders at least for a few days now”, L Vairavan, an exporter said.

 He added that “Some parts of Germany have announced that the rising Covid-19 cases are causing so much concern that protecting people is their priority for which lockdown is imposed. We fear that this will have a cascading impact in other parts of Europe as well. Transport restrictions mean the lesser possibility to export tea.”  

Christmas Season 

Vairavan said, “Many countries used to import our tea ahead of Christmas to build stocks during harsh winter but this year, exporters had a testing time with a shortage of sea containers and prohibitive transportation costs. In some cases, importers pointed out that transportation cost was more than the tea in the container.”

According to the Tea Board’s official data, in January – August 2020 - the price of exported Indian tea rose from Rs 230.84 to an average of Rs 272.92 per kg that marking an increase of 18.23 percent. However, a decline of 11.62 percent is seen as the shipping volume decreased from 134.47 mkg (million kg) to 118.84 mkg in Jan-Aug 2020.  

The overall export earnings rose from Rs 3,140.04 crore to Rs 3,243.37 crore in January-August 2020, which is a gain of 4.49 percent. 

To Indian tea exports, price-wise and earnings wise Germany is very important and is also among the few countries which bought a higher volume of tea from India this year and paid a higher price than last year. Germany imported 5.78 mkg (Jan-Aug: 5.16 mkg) at Rs 343.84 a kg (Rs 250.47 a kg) spending Rs 198.74 crore (Rs 129.24 crore).  

The CIS continued to top India’s tea export table but with a lower volume, price, and value than the last calendar. CIS imported 28.18 mkg (34.51 mkg) at Rs. 188.44 a kg (Rs. 164.97) spending Rs. 531.02 crore (Rs. 569.32). Volume-wise, Iran followed at 15.47 mkg (23.87 mkg) paying Rs. 254.74 a kg (Rs. 267.23) and spending Rs. 394.08 crore (Rs. 637.87 crores). Price-wise, Ireland paid the highest price of Rs. 748.65 a kg (Rs. 742.59). Value-wise, next to the CIS, the US topped at Rs. 408.23 crore (Rs. 254.40 crores).