The war in Iraq has sent tea export to Iraq for a six. Around 23 per cent of Indian tea exports are shipped to Iraq, which has been identified as one of the key export markets.
During January-November 2002, Iraq lifted around 40.25 million kg of tea. In comparison, CIS picked up 52 million kg Russia, traditionally considered to be the most important export market for India, accounted for 40.22 million kg.
But, now with the war, uncertainty looms over Indian tea exports.While exports to Iraq was around 40 million kg, the total basket of exports during the same period was 175.30 million kg.
N K Das, chairman Tea Board of India said that, Iraq has turned out to be an important market over the last one year as exports have increased substantially. "Now with the war we do not know when the next shipments will take place," said Das.
The last tender floated for Iraq was for 19.5 million kg. In fact, Accenture, appointed for drafting the medium-term export strategy for India, has identified Iraq as one of the key markets for Russia. Some of the industry representatives said that the loss of market share in Russia was being compensated by the Iraqi exports.
Most of the shipments last year was in the latter half of the year and some industry experts are hopeful that shipments will materialise in the second half of the year and if it is a short war. But, many pointed out that even if the war ended before June-July the outcome of the war would be crucial for the determination of the fate of Indian tea exports.
Das however added that the industry was hopeful that there would some movement from the United Nations and things would normalise. "We will have to wait and see," he said.
The tea exports were being made under the Iraqi oil-for-food programme. In 1995, under the United Nations Charter, the Security Council established the "oil-for-food" programme, providing Iraq with an opportunity to sell oil to finance purchase of humanitarian goods and various mandated activities concerning Iraq.
However, the programme, as established, was intended to be a temporary measure to provide for the humanitarian needs of the Iraqi people. Some tea industry representatives said, the extent of control on the oil-for-food programme in the post-war scenario would determine Indian exports.
