Nato supply disruption reduces tea smuggling

Tea smuggling from Afghanistan has started declining after disconnection of NATO supply and improvement in border control system during last few months. With the slight decline in smuggling from the neighbouring country, the legal import of the highly consumed kitchen item has also started increasing, sources told Profit. Though improvement in legal imports of tea is temporary and lesser as compared to over 40 per cent smuggling Afghanistan, the fresh move of controlling borders will benefit the country, they said. According to S Ahmed Khwaja, Vice Chairman, Pakistan Tea Association (PTA) the interruption in NATO supply from Pakistani border has caused decline in smuggling in the couple of months. Tea, as one of the major import items of Afghanistan under Afghanistan Pakistan Transit Trade Agreement (APTTA), was mostly being smuggled to Pakistan as it was not being consumed in the neighbouring country. Major import commodities included yarn and synthetic staple fibers fabric; electrical appliance and equipment; yarn and fabric of synthetic filament; machinery and mechanical appliance; paper and paperboard; animal and vegetable oils; coffee and spices; rubber and article thereof; sugar and sugar confectionaries; auto parts and accessories, etc.
As consumption of tea has been increased in the country owing to the change of season, the price of the highly consumed item was also likely to be increased with reduction in imports, sources claimed. Prices of different varieties of tea, which are consumed at higher rate in the winter season, were likely to increase by the end of this month in local wholesale and retail markets. Though this was the seasonal demand, but reduction in tea smuggling could cause increase in price even after the change of season.
As the demand would also register a jump by at least eight per cent during the next few months, the jump in demand would affect prices in the market. According to statistics provided by PTA, import of black tea increased to 8.4 million kilograms in November with the increase of 12 per cent as compared to 7.5 million kilograms in October.
Import of green tea has also shown an increase of 133 per cent as the item in November was recorded at 350,000 kilograms compared to 150,000 kilograms registered in October. Black tea prices currently vary at wholesale prices from Rs360 per kg to Rs460 per kg and green tea from Rs350 per kg to Rs450 per kg.
According to sources, Pakistani market consumes 225,000 tonnes a year currently with handsome annual growth in imports and sales. The import of black tea is heavily carried out from different countries for meeting the local demand. Pakistan meets its green tea requirement from five countries including Indonesia, Vietnam, Bangladesh, China and Sri Lanka. Vietnam has a major share of 64.38 per cent in this group. Indonesia, Bangladesh and China’s shares in Pakistan’s green tea market are 2.33 per cent, 3.58 per cent, and 29.76 per cent respectively.