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Tea in Pakistan

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Nipun Wisnagalage
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Worlds’ No 1 Tea Importer to Pursue Tea Plantation on Commercial Scale

Tea is the most consumed beverage in the world after water. No exception in the world’s largest tea importing nation, Pakistan as well. Tea is a ways of life in Pakistan. On cold winter evenings in Lahore’s Lakshmi Chowk, a bustling marketplace well known for street food, tea vendors sell a pink tea beverage known as Kashmiri chai. As China Economic Net had reported, while pursuing tea plantations on a commercial scale, the government of Pakistan has decided to cultivate tea on an area of about 25,000 acres over the next five years.

SHINKIARI: A view of tea garden in Mansehra, Pakistan
Image Credit: Dawn

On the recommendation of Chinese tea experts, the National Tea Research Institute (NTRI), later renamed as National Tea & High value crops Research Institute (NTHRI), was set up on 50 acres of land in Shinkiari in 1986. NTHRI is playing an important role in promoting tea cultivation in Pakistan.

Out of the proposed 25,000 acres of land, 10,000 are government-owned forests; 12,000 acres are private land where the Forest Department has planted forests while 3,000 acres of land have been identified in Azad Kashmir. As per the government plan, during the next phase, the tea plantation would be extended to all tea-cultivable lands of the country.

Pakistan has great potential for growing tea, according to Mr. Jamshed Iqbal Cheema, Special Assistant to Prime Minister on Food Security, as the country has 178,000 acres of tea cultivable land. “Pakistan can grow its own tea,” he said, adding that the country imported 30 million tons of tea each year from 15 different tea-producing countries.

Cheema said Pakistan spent USD 0.54 billion annually on importing tea. The import value of black tea is USD 0.53 billion while USD 0.01 billion goes to green tea’s import.

While inviting private tea companies to invest in the tea sector, Cheema said, “We are ready to facilitate and solve any problems of the private companies regarding their investment.” The government is providing an opportunity to the private companies to invest and to promote the tea trade, which would also create thousands of jobs for the locals. The Ministry of Food Security has allocated Rs8.5 billion budget for high-value crops and cluster development.

According to experts, China from the beginning has played a vital role in tea promotion in Pakistan. As potential suitable sites and land for tea cultivation are located alongside the China-Pakistan Economic Corridor (CPEC), China has a big role to play in promoting tea on a commercial scale through joint ventures and technical and financial support.

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References

  1. Main Source: http://en.ce.cn/main/latest/202108/07/t20210807_36785946.shtml
  2. More Info: http://www.parc.gov.pk/index.php/nthri-introduction
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Nipun Wisnagalage
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Sri Lanka to Market Value-Added Tea in World’s No 1 Tea Importing Nation !

Tea is the most consumed beverage after water. No exception in the world’s largest tea importing nation, Pakistan as well. As Sri Lanka Export Development Board had reported, A webinar was held between the Sri Lanka High Commission and some Reputed Tea Importing Companies in Pakistan on the 14th of July 2020 to exploit the market for Ceylon Tea by marketing value added tea. The following observations were emphasized during the webinar;

Quoted from: https://www.srilankabusiness.com/news/webinar-on-exploring-the-pakistan-tea-market-for-ceylon-tea.html,

Observations

  • The Sri Lankan Tea (Ceylon Tea) that had a 75% of the market share in Pakistan in the seventies and early eighties has dwindled to less than point 0.1% at present. Pakistan is one of the highest tea importing countries and also has a very high tea drinking population.
  • The reason for dominating the tea market in Pakistan in the seventies and early eighties by Sri Lanka was the result of the Indo-Pakistan war in 1917 that halted tea that was brought in to then West Pakistan from its former East Pakistan or now Bangladesh. The tea imported from India too was affected with the collapse of trade due to strained relations after the war that lasted for over a decade to normalize. Pakistan during this period had not many options other than to import tea from Sri Lanka to meet the demand in Pakistan.
  • Majority of the tea drinkers in the lower middle to low-income group in Pakistan, drink tea as a food, where tea is boiled together with milk and sugar in a pot and most instances consumed with Parotta or Rotti. Such tea drinkers do not look for the taste or the aroma but strength, color and price.
  • African countries especially Kenya that started growing tea long after Sri Lanka, has been able to keep their production prices at very low levels whilst increasing their yield at a tremendous rate maintaining the quality and supply round the year. They manufacture CTC teas that are different to Sri Lanka orthodox teas. However, they had no difficulty to market their tea in Pakistan. Kenya currently supplies almost 80% of tea to Pakistan.
  • Till about 1985 the one of main tea packer and distributer, Tapal Tea had imported tea from Sri Lanka to pack or to mix and pack with East African cheap CIC to the Pakistani tea drinking population.
  • With Sri Lanka capturing the Russian tea market of packed tea, the bulk tea prices too in Sri Lanka had sky rocked, becoming unaffordable to be bought for blending with even  African CTC for the Pakistani consumer.
  • Sri Lanka tea auctions are dominated by tea packers and Sri Lanka packed value added tea cannot compete with Pakistan packed tea due to their high price.  
  • Even after-Tax relief under FTA, the Sri Lankan tea is non-competitive in price with East African Teas.
  •  Small quantities of Sri Lanka tea had reached the Pakistan market during the recent years for the purpose of blending when there had been sadden spikes in the pricing of African CTC.
  • Northern regions of Pakistan consume orthodox teas without milk and Sri Lanka orthodox tea can have a market there, if they can compete with the prices of other orthodox teas that are produced in Bangladesh and India.
  • Dilmah value added teas, that has a great market share in Europe has not done well in Pakistan.
  • CTC manufactured by some plantation in Sri Lanka like Hunasgiriya, had not penetrated the Pakistan CTC market unable to compete in pricing with the East African CTC teas.

Conclusion and Recommendation

  • Penetrating the Pakistani tea market with Sri Lanka orthodox tea will be a daunting task at present unless the gap of pricing between the African and Sri Lankan teas are minimized. (As per the huge increase of production cheap CTC from Africa and  China this situation may aggravate further)
  • Sri Lanka can plan to market value added packet tea to the niche market in Pakistan with their orthodox teas provided that the production cost is bought down to be more competitive and with extensive advertising.
  • Sri Lankan exporters may also explore the possibilities of blending Sri Lankan tea with cheap CTC tea from East African countries and export them to Pakistan with a competitive pricing.

Quoting Completed.

Let’s hope to see more Ceylon value added tea packs in Pakistan.

Source : Pakistan High Commission of Sri Lanka

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