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ACCENTURE
REPORT
On Medium Term Export Strategy
For Indian Tea
The world production
of tea in 2000 was 2,903 mkgs. And, India with 27 per cent
share (very closely followed by China with 23 per cent share)
enjoyed the numero uno position among the world's tea-producing
countries.
This, however, is only the brighter side of the picture.
Today, in the global tea scenario, overall absorption is
lagging behind supply, creating an over-supply situation.
This has led to a worldwide softening of prices and decline
in profitability. India is among the worst affected countries.
Moreover, the worrisome trend of our country's dwindling
exports and loss of quality image continues to bother the
domestic tea industry.
It is because of these irritants that in 2001 India began
a desperate search for a way out of the situation. The Tea
Board commissioned consultancy firm Accenture on the task.
Last month, Accenture tabled its final report, titled 'Medium
Term Export Strategy for Indian Tea', which tried to achieve
the three-fold objectives of developing an export strategy
for Indian tea, define export targets for the period 2001-06
and also formulate an execution plan.
The observations taken into account by Accenture while formulating
India's export strategy were:
•Only 27 countries account
for 85 per cent of total world imports - India must have
a very sharp focus
•The largest tea importing
countries are Russia, UK, Pakistan, USA, Egypt and Japan
accounting for 50 per cent of world imports - India must
formulate country-specific strategies
•While UK, Pakistan, Egypt
and Poland are the main CTC markets, there is a far wider
spread of the orthodox market (around 20 countries each
with imports of 10 mkgs) -India must optimise its Orthodox:CTC
mix.
On the production front, 77 per cent of world tea is black
and the rest green. Since India is primarily a black tea producing
country, it has a large market to exploit. In the black tea
segment, around 59 per cent of production is CTC and 41 per
cent Orthodox. |
While
the large producers of CTC are India, Kenya and other African
countries, the Orthodox producers are Sri Lanka, Indonesia,
Argentina and Vietnam. India's task at hand is to consolidate
its CTC position and grab more of the Orthodox market.
Accenture also took note of the fact that 86 per
cent of world exports is black tea and the rest 14 per cent
green. While China is the largest producer of green tea,
the other significant producers are Indonesia, Taiwan, Vietnam
and Japan. It has been suggested that with its miniscule
green tea produce, India's efforts must be directed towards
the black tea segment.
Taking all these factors into account, Accenture selected
22 markets on the basis of import offtake (not consumption)
for high-level scanning as export destinations of the Indian
brew. The countries - these account for 75-80 per cent of
world imports - are Russia, UK, Pakistan, USA, Egypt, Japan,
Morocco, Iraq, Iran, Poland, Dubai, Syria, Germany, Canada,
Saudi Arabia, Australia, Sudan, France, South Africa, Chile,
Ireland and the Netherlands.
It was also observed that:
• India's Orthodox competitors
- Sri Lanka and Indonesia - have diversified portfolios
• Kenya, India's main
CTC competitor, has depth and stability of leadership in
its markets
• While India exports
the largest range of teas, its product quality rates lower
than Sri Lanka and Kenya in many markets
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