New strategy to increase Indian tea export

Talking with a tea friend from Bangladesh over the phone and gave me this news- Indian tea board is trying to open a auction house in Dubai,UAE. Indian tea industry is suffering last couple of year. Middle-east is considered as very strong tea market and Dubai is really a business hub. Dubai is the Singapore of middle-east-beautiful city, exotic food, excellent business infustructure. Though my experience was except mint tea, other teas were not widely available. Anyway, India want to catch the middle-eastern buyer before even they come to South Asia to buy teas- that means Bangladesh, Sri lanka or can be even Africa. My friend is related with tea industry last 20 years. He asked my opinion and I told him- even if Indian government take this decision, it will help them a little because:

-In India the main problem in the tea industry is lack of capital

-Indian tea production cost is highest compare to other tea growing countries

-Indian tea marketing in the western market is totally middle-man dependent(That has been adding an extra cost)

-Indian tea board is not exploring their new types of tea(example-Dooars, Terrai etc.)

-They are not trying hard to solve their problem in Assam region(many tea estate use excessive pesticide also every year new tea estates are closing down for political and lack of capital)

-Indian tea business people are not aggressive enough compare to Sri Lankan, Kenyan tea industries

-Sri Lanka spend lot of time and money on tea research(privet "Dilmah" company has an excellent tea research centre, they are also a multinational tea company) and their clone teas are getting more and more popular day by day(Some of you might not like Clonal tea but the fact is- it is getting popular day by day)

-Nepalese teas got their own reputation for having some similarity with Darjeeling, some people who like cheap Darjeeling- are fond of Nepalese tea Overall opening a new auction house sounds very aggressive but my humble opinion is they are forgetting the core product-TEA rather then marketing strategy. They need to reduce their production cost. Also Iraq war effected Indian tea industry strongly(According to one of my Indian tea friend in India.) In middle-east mint tea is drunk by green(mostly Chinese Gunpowder) and black(Ceylon mostly). I think it won't be so easy to penetrate the tea market with an auction house. Changing customer's test, takes time. Example: Still US people are exploring tea taste and off course the future is bright. I remember at TakeMe2Tea Expo. how aggressive SriLankan business people were, weather tea board of Ceylon even didn't send any representative. I was talking with this tea executive from "Chami" tea- I asked him , why their tea boards were not attended, his answer was- he came by himself because he thought he should. He didn't wait or even care for their tea board. I have seen the same mentality over other Sri Lankan tea companies their. Indian tea board people in that scene, were a little less aggressive. Anyway, I shouldn't make this post too long. You might already are bored. Just wanted to share some latest tea information with fellow tea mailers. Ripon Vienna,VA

Ripon,

A good summary of the factors holding Indian tea back in the world market. Certainly they need to address cost of production which is way below prices at auction, particularly for the South Indians - and in the direction of reducing production cost bought leaf factories are flourishing. They buy greenleaf from small farmers and do not have the overheads of garden owners (provision of on-garden schools, medical centres, temples, ships, housing, subsidized foods) and can process at just above cost of production to remain viable while gardens go into the red. Many garden owners are wondering how they can compete - even to the extent of considering gifting their land acre by acre to their workers - who would thus be self employed without the rights to traditional freebies.

Mainly however, I think that it is the auction system itself that is holding Indian tea back. Private treaty sale allows (nay, ensures that) the producer is closely in touch with the consumer, responding to market needs. The auction system allows any tea to be sold whatever the quality, the value, the market need. Sure, a good tea will get a better price, but garbage teas will shift at some price - this supports the lazy and complacent producer. Not so with private treaty sales, these encourage the better and the innovative producers.

Nigel at Teacraft