Surge in consumption of inferior black tea varieties
January 24, 2013
MOHAMMAD BILAL TAHIR
The market of imported black tea is set to expand, as consumers are fast developing the taste for the low-priced commodity, industry sources said on Wednesday. Black tea, as a result posted an increase of Rs 30-50 per kg on the retail market, they said, adding: “Black tea is now selling between Rs 350 and Rs 410 per kg, depending on its quality”.
“Black tea varieties, usually considered to be of low quality, are capturing a significant share in the retail market because of soaring prices of high-quality tea, widening the demand and supply gap of low-priced tea varieties, pushing up the commodity’s prices,” said a trader.
During a visit to local market, it was observed that low priced tea imported from Burundi, previously being sold at Rs 230 per kilogram, was now being sold at Rs 350 per kg. Likewise, other black tea varieties such as ones being imported from India also witnessed sharp increase in prices, rising up by Rs 50, settling at prices ranging between Rs 280 and Rs 410.
Importers and blenders said that they were absorbing the impact of devaluation of Pakistani rupee against US dollar and increase in prices of Kenyan tea. Traders said that prices of black tea varieties had been posting a steep rise for the past six months in the retail market.
They said that the government’s move to reduce sales tax from 16 percent to 5 percent on tea imports did not even make a dent in prices. It sharply increased in the local markets by 8 to 11 percent since July last year. A trader said that the government had reduced sales taxes on tea imports to discourage smuggling, but instead tea prices had increased manifold during the past five months.
Previously, the wholesale price of ‘Danedar’ (BP-1) tea in the wholesale market was Rs 540 per kg, which is now being sold at Rs 545 per kg while its retail price was Rs 565per kg. Similarly, the price of leaf (PF-1) tea variety is being sold at Rs 565/kg in retail markets against its previous price of Rs 560/kg. The previous wholesale price of the same variety was Rs 515/kg, currently being sold at Rs 520/kg.
Chairman of Pakistan Tea Association (PTA) Hamid S Khwaja said that the costlier varieties of black tea were diverting consumers to purchase the inferior quality tea because of cheaper rates. Total tea consumption in Pakistan ranges between 200,000 and 225,000 tons and the average annual consumption is estimated to be 1.3 kilogram per person.