The import of tea has increased by almost 33.7 per cent in the last fiscal year compared to the year before. The cause for concern is that 40 per cent of the total tea in Pakistan is smuggled. The import of black tea has increases to 127.316 million kilogram (worth $301.544 million) during FY11 from 95.219 million kilogram (worth $252.605 million) in FY10, marking an increase of 33.7 per cent.
Despite trade constrains between the two neighboring countries, the import of tea from India has increased by 17 per cent in financial year 2010-2011. The import of black tea from Kenya has decreased from 60 per cent during 2009-2010 to 55 percent in the last financial year. According to the latest statistic provided by Pakistan Tea Association (PTA), almost 21.812072 million kilogram of tea worth $27.198 million has been imported from the neighboring country in the last financial year as compared to 8.265419 million kilogram of tea worth $15.529 million during the FY10.
This marks an increase of 17.12 per cent. Though in terms of quantity the import of tea from Kenya has increased from 58 million kilogram (worth $175.158 million) in 2009-2010 to 70 million kilogram (worth $204.785 million) in 2010-2011, its share in the total import of Pakistan has reduced five per cent. A mjor reason for this decrease is increase in smuggling from Afghanistan.
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 shares in Pakistan’s green tea market are 2.33 per cent, 3.58 per cent, and 29.76 per cent respectively. Talking to Pakistan Today PTA Chairman Mohsin Saifi, said that the above data is valid however, a major part of tea consumed in the country is smuggled from Kabul through misuse of the Afghan-Pakistan Transit Trade Agreement (APTTA). According to a survey, he said, “every second cup of tea consumed by the people of Pakistan is smuggled from Afghanistan.” This smuggling could take over the market within the next few years if authorities do not remedy the situation, he said.
He added that currently the ratio between tea imports through legal and illegal channels is almost equal. Furthermore, the government is losing $50 to $80 million annually in revenue due to tea smuggling through Afghanistan, Saifi said. According to the official in PTA the country uses about 170 million kilogram of tea annually making Pakistan the third largest importer of tea in the world. However, 70 million kilogram of it is smuggled into the country through Afghan Transit Trade and is hurting the local market.
