On the other hand, income from exports to USA during the aforesaid period declined to $ 35.97 as against the income of $ 48.40 resulting in a 26 per cent fall.
Sugato Dutt, director at Subodh Brothers – a tea export firm in the east coast, said, “The US has tightened norms on the maximum residue level (MRL) which have impacted sales”.
The European Commission defines MRL as the highest level of a pesticide residue that is legally tolerated in or on food or feed when pesticides are applied correctly.
While 34 different varieties of chemicals, used in pesticides and for treating the tea leaves are permitted, chemicals like DDT and Lindane has been banned in USA while the license permitting Endosulfan has expired and will not be renewed. Tea, having chemicals like Ethion, Tetradifon and Triazophos, will be denied entry into the USA.
In a recent notification, the Tea Association of the USA has appealed to the Indian tea producers and exporters alike to desist from shipping any tea where these chemicals or even its traces are present.
“The EU has already tightened norms on MRL but there was some relaxation in USA; but it has changed now”, Dutt said.
On the other hand, Indian exporters fear that US-based importers have started sourcing high-quality orthodox tea from Sri Lanka in larger quantities.
At the time of the Gorkhaland crisis last year, when every tea estate in Darjeeling was shut for over 100 days at a go during the prime harvest season, tea exporters had feared that developed orthodox tea consuming countries would shift their sourcing pattern towards Sri Lanka or China, which in turn would hurt Indian exports in the near-term.
“Last year, owing to non-availability of the pricier Darjeeling tea, US buyers had moved over the sourcing towards Sri Lanka and others. This year, none of my US based buyers of prime Darjeeling tea are responding to sales calls”, an exporter from Kolkata lamented.
So far, this year, India lost 2.58 per cent of its market share in the US black tea market while Sri Lanka had more than doubled its market share in that country. Currently, India’s market share stands at 9.86 per cent while Sri Lanka commands 4.39 per cent of the total black tea market in USA.
Indian orthodox teas fetch one of its best prices in USA which usually hover around $ 4.60 a kilo. It is more than 50 per cent higher than what a kilo of the average Indian tea sells for every year.