Further strengthening of rupee may impact tea exports: ITA

Further strengthening of the rupee against the dollar and euro may adversely impact Indian tea exports, an industry official said.

"Though the price of tea is ruling high internationally, the appreciation of the rupee against the dollar and euro is a matter of concern for exporters. This could have an impact on exports," Indian Tea Association joint secretary Sujit Patra told PTI.

India had produced 979 million kg of tea last year, out of which 200.2 million kg had been exported to about 60-65 countries at an average price of Rs 136.65 per kg.

The rupee is currently being traded at Rs 46.75 against the dollar, down from Rs 47.4 in the previous year. The rupee also appreciated against the euro and was valued at Rs 57.69 as on May 20, 2010, against Rs 65.36 on May 21, 2009.

Fierce competition already exists among exporting nations such as Sri Lanka, Kenya and China to achieve prominence in the global tea market, which is yet to recover from the recession.

"The fall in rupee could impact the margin for Indian tea exporters as the cost of production is highest in the world," Patra said.

In the first three months of the current year, India had exported 47.2 million kg of tea, up 22.8 per cent from the same period a year ago.