Pakistan Tea Trade analysis
Pakistan is a country in southern Asia with diverse climatic regions. The land of Pakistan is a combination of mountains, coastal regions and plains. Pakistan shares its border with India on the eastern side, Iran on the western side and Afghanistan on the northern side.
The entire region of India, Pakistan, Iran & Afghanistan boasts of tea as an integral part of their culture. Pakistan was a British colony till 1947. Hence, the tea was introduced here by British in the colonial era. Since then, most households of Pakistan have developed a habit of drinking tea every day.
Trade Analysis of Tea:
- Pakistan is the largest importer of tea in the world (Source ITC trade data 2018). It imported tea worth USD 571.33 Million is 2018. The imports have seen Year on Year growth of 14% between 2014 to 2018. It has a dominant share of 7.8% of the total imports of tea in the world.
- Pakistan has been traditionally buying tea mostly from tea suppliers in India. However, in recent times, there has been a change in the trade pattern. Currently Kenya is the largest tea supplier to Pakistan. In 2018 alone, tea worth USD 440 Million was sold by Kenya to Pakistan. This contributed to almost 77% of the total tea imported by Pakistan.
- Tea export from Kenya to Pakistan has shown a steep growth in recent times. The export from Kenya to Pakistan has seen a year on year growth of 12% in volume and 17% in value.
- Rwanda is the 2nd largest tea supplier to Pakistan. It supplied tea worth USD 42.65 Million to Pakistan. Rwanda has seen a growth of 10% in volume & 18% in value. The supplies in 2018 contributed to 7.5% of the total imports of Pakistan.
- India is the 3rd Largest tea supplier to Pakistan, It supplied tea worth USD 24 million in 2018, contributing to 4.2% of the total imports of tea from Pakistan.
- Tea trade from India to Pakistan has declined by 14 % by volumes & 2 % by value in 2014-18. The possible reason for this decline could be the conflict between the two nations which resulted in changes in the trade policies.
- Among the other tea supplying nations to Pakistan are Vietnam, Tanzania, Uganda, and Indonesia, which together contributes to a small portion of the supplies.
- Some of the imported tea is re exported from Pakistan to Afghanistan. In 2018 this amount value was worth USD 16.4 Million. Afghanistan is the only significant re export market identified for the tea supplied from Pakistan.
- Pakistan is making attempts to grow tea in Khyber Pakhtunkhwa region near Kashmir. If the crop is successfully cultivated, then the countries reliance on the imports will reduce up to some extent.
- Pakistani market is price sensitive in regards to import of tea, hence the African countries are at an advantage, as the cost of growing tea in Kenya & Rwanda is significantly lower than in India and Sri Lanka.
- In the current scenario and even in the near future, Pakistan will continue to be the major import market, creating a large opportunity for African tea growing nations like Kenya & Rwanda.