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Reopening of Australian Borders Raises Expectations for Tea Shipments

The reopening of Australia's borders comes at a time when Europe, the United States, and Canada are posing a threat to tea shipments. Canada is the highest-paying importer of India tea, with an average pay-out of $10.24 per kg this fiscal year, up from $5.71 the previous year.

Shivam Dwivedi
Plucking of Tea Leaves
Plucking of Tea Leaves

With Australia reopening its borders and welcoming tourists since Monday, prospects for increased tea exports from India to that continent have improved. Australia is one of the highest-paying importers of Indian tea. According to the Tea Board, Australia has paid an average of $5.76 per kg for Indian tea so far this fiscal year, compared to $5.55 in the same period last year.

However, its borders had remained closed since March 2020 due to its fight against Covid-19, making the tea movement difficult.

"Previously, India shipped about 2.50 million kg of high-priced teas to Australia, but shipments fell short by at least a million kg in the last two years due to lockdown in India and border closure in Australia," as per an exporter.

The reopening of Australia's borders comes at a time when Europe, the United States, and Canada are posing a threat to tea shipments. Canada is the highest-paying importer of Indian tea, with an average payout of $10.24 per kg this fiscal year, up from $5.71 the previous year.

"However, because of the nationwide protest against mandatory vaccination, tea shipments to Canada have been halted," said L Vairavan, an exporter. The United States is another high-paying importer of Indian tea, paying $5.83 per kg this fiscal year compared to $5.68 last year.

However, "the prolonged snowfall and declaration of emergency by some states has hampered tea shipment to the United States." Furthermore, with the United States threatening to impose sanctions on Russia over the Ukraine crisis and the likelihood of a re-bouncing, exporters are taking a "wait-and-see" approach when shipping to the United States, according to Vairavan.

"As a result of Russia-Ukraine tensions, most European nations face the threat of war." "Exporters are hesitant to ship teas and are less optimistic about receiving payments right now," he said.

In the current fiscal year, India shipped 1.51 million kg of tea worth 64.59 crore ($8.70 million) to Australia at a unit price of 427.75 per kg ($5.76), compared to 1.82 million kg worth 75.31 crore ($10.11 million) at a unit price of 413.79 per kg ($5.55) last fiscal. In comparison, the CIS, India's largest importer, has paid only $2.42 per kg so far this fiscal year, compared to $2.48 last year.

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