India aims to boost tea exports to Pakistan after record crop Mon Apr 30, 3:10 AM ET

A team of planters and traders returned Sunday from Pakistan to market India's mainly black tea varieties from the lush hills of northeast India famed for Darjeeling tea and from the southern Kerala and Tamil Nadu states.

Because of trade barriers caused by decades of bitter conflict between the South Asian rivals, green tea varieties from Sri Lanka and Kenya are more widely sipped to Pakistan and

Afghanistan.

But with a peace process underway since January 2004 and falling customs barriers, the Indian tea industry hopes to greatly expand trade.

"Some giant steps were made during the recent visit with a proposal to set up a tea container depot. The response has been very positive," said Dhiraj Kakaty, secretary of the Indian Tea Association's branch in Assam state.

The insurgency-hit northeastern state of Assam accounts for over half of the tea production in India, which recorded a jump in exports this year after a nine-year slump.

Last year, Pakistan imported about 16 million kilograms (35.2 million pounds) of tea from India to meet a shortfall in its domestic use of 170 million kilograms.

The Indian business team visited the tea markets of the Pakistani cities of Lahore, Peshawar and Rawalpindi.

The industry body has also set up marketing bureaus in Cairo and Tehran as part of its drive to boost exports to Egypt and

Iran.

"We are getting queries from all these countries and we hope to do some good business," Kakaty said.

Buoyed by export successes this year, India's federal ministry of commerce will organise an international tea festival in Assam's main city of Guwahati in November.

"We are expecting delegates from Pakistan, Iran, Egypt, the United Arab Emirates and the United Kingdom for the festival that is expected to help improve exports of tea," the official said.

India's 1.5-billion-dollar tea industry has been in a slump since 1998, with prices and exports plummeting because of weak domestic demand and increased international competition.

But last year it produced a record 955 million kilograms, 27 million kilograms more than in 2005, Kakaty said. Exports went up by about 8 million kilograms to 200 million kilograms.

Now, weekly auction prices are on the rise as well. Prices for good-quality Assam tea last week hit 73 rupees a kilogram after languishing below 65 rupees last year.

Last year, the Indian government announced a 50-billion-rupee (1.1 billion dollars) package to help the industry replant tea bushes and boost quality.

Source: AFP