Govt. Allowed Export-Oriented Units (Eous) To Sell More ‘Instant Tea’

New Delhi: In a boost to the domestic tea vending industry, the government has allowed export-oriented units (EoUs) to sell more ‘instant tea’ in the domestic market to meet the growing demand in the country.

There is a strong demand for instant tea due to increased consumer preference for convenient, instant food and beverage products.

The Commerce Ministry has now increased the cap on EoU sales of ‘instant tea’ in the domestic tariff area (DTA) from the existing 20 per cent of free-on-board value of exports to 30 per cent. This will improve availability of ‘instant tea’ for tea vending industry, which has been importing (instant tea) from Sri Lanka and other foreign markets, say industry players.

So far, instant tea has largely been exported by tea majors including Tata Tea, Hindustan Unilever and Nestle.

The ‘instant tea’ exports have recently seen some slowdown due to a decline in export orders on account of the appreciation of the rupee against the dollar.

However, the domestic tea vending industry, valued at about Rs 400 crore, has been growing at 35 per cent compounded annual growth rate (CAGR) in the recent years, say industry observers.

“This is a progressive step. It will not affect the domestic tea industry as EoUs are still not permitted to sell tea (instant tea excluded) in the domestic market. The tea growers will continue to be protected. The cap should have been raised to 50 per cent as available for a number of products,” industry sources said.

In fact, seeing the growth prospects for this industry and also its employment creation potential, the Finance Minister, P Chidambaram, had in Budget 2008-09 announced full excise duty exemptions on tea/coffee pre-mixes.

Currently, EoUs are permitted to sell up to 50 per cent of their free-on-board (f.o.b.) value of exports in the DTA. There are, however, exceptions to this norm. The EoUs are not allowed to sell motor cars, tea (excluding instant tea) and alcoholic beverages in DTA.

More Curbs On Rice Exports To Ensure Domestic Availability

New Delhi: The Directorate General of Foreign Trade (DGFT) has hiked the minimum export price (free on board) of non-basmati rice from $500 to $650 per tonne and also slapped port restrictions.

DGFT also fixed the minimum f.o.b export price of basmati rice at $900 per tonne. In the case of rupee-based non-basmati rice exports to the Russian Federation, the minimum f.o.b export price has been hiked from Rs 20,000 per tonne to Rs 26,000 per tonne.

Ports through which non-basmati rice exports are permitted include Kandla, Kakinada, JNPT in Mumbai and Kolkata, depriving exporters access through other major ports such as Kochi, Vizag, Chennai, Mangalore and Tuticorin.

This could impact export of a few speciality rice of South India such as Ponni and Matta (red rice from Kerala). South Indian non-resident Indians in Singapore, Malaysia, UAE, Kuwait, Saudi Arabia, Europe and the US would feel letdown by their increasing costs.

When contacted, Secretary, South India Rice Exporters Organisation, Mr. P. Vishnukumar, told Business Line that the f.o.b export price of non-basmati rice has been hiked regularly, from $425 a tonne in October 2007 to $500 a tonne in December 2007 and now, to $650 a tonne.

Sale trail

At this latest rate, the export price has gone up to Rs 26 per kg, whereas it is sold at Rs 22 per kg in the domestic market. On the other hand, export price of basmati rice abroad is Rs 36 per kg while in the domestic market it is sold above Rs 45 per kg.

He said that in the case of basmati rice, the export price fixed is a sort of subsidy whereas in the case of non-basmati premium rice varieties, the minimum price fixed now acts as a deterrent to exporters.

He said that at a time when competitors like Thailand, producing similar premium varieties, are selling in the overseas market at $480 per tonne, Indian premium non-basmati rice has been earning $500 per tonne.

With the new minimum f.o.b price, the Indian premium varieties would be at a cost disadvantage.

Exporters from Tamil Nadu and Kerala would be hit by port restrictions as the Kakinada port does not have container cargo facilities and taking this either to Mumbai or Kolkata would add to freight cost, rendering their products further uncompetitive.

Complaints from South

Rice exporters from the South in general complain that the new policy clearly discriminates the speciality rice exporters of the region, while promoting the export interests of the rest in the country.

Considering the fact that North India has surplus rice production and South has short supply, the present policy matrix would divert available supply from the North to elsewhere, including overseas markets.

They further plead that if the Government does not come out with special policies such as tariff rate quota on Ponni and Matta rice, there would be a virtual halt in export of speciality South Indian rice, given the highly uncompetitive status to which the premium non-basmati rice varieties has been consigned to by policy changes.

Domestic Market Important For Fisheries

Kakinada: The domestic market is as important for the fisheries sector as the export market, and therefore attention should be paid to their equal development, said Dr S. Ayyappan, Deputy Director-General of the Indian Council of Agricultural Research (Fisheries). Run-up to Budget 2008-09

He was talking to the press here on Monday, after inaugurating a molecular biology laboratory at the Central Institute of Fisheries Education. He said the focus should be on the metros and other cities in promoting fisheries. It was not desirable to depend entirely on the export market, even though export earnings were necessary.

He said there was demand for jellyfish and octopus from China, Singapore and Hong Kong. “India is trying to meet the requirements subject to certain restrictions. The Indian fisheries industry is diversifying into species other than shrimp of late and that is a healthy trend,” he remarked.

On the whole, however, growth of the agricultural sector, of which fisheries is a part, was not very impressive in comparison with the other sectors in recent times, Dr Ayyappan said.

He said the fisheries sector could deal with the problem of anti-biotic residues in exported fish and efforts to meet the quality specifications of the US and European markets were considerably successful.

Dr Dilip Kumar, CIFE Director, said the institute was conducting training programmes for farmers and soon a fresh batch of 400 farmers would join the institute. Later, he participated in a seminar on aquaculture conducted by Adikavi Nannayya University at Rajahmundry.

He spoke about the problems and prospects of the sector in Andhra Pradesh.