Pakistan, India sign MoU on tea trade
By Aamir Shafaat Khan
KARACHI, May 22: Leading tea Indian packers and blenders, instead of striking any sale contract and agreement with local counterparts, flew back with a simple copy of memorandum of understanding (MoU), aimed at facilitating tea trade between the two countries.
The MoU, signed by the chairman, Pakistan Tea Association (PTA), Saeed Ahmed Khawaja and chairman Indian Tea Association (ITA), Chnadra Kumar Dhanuka on May 21, focuses on eight points to increase bilateral tea trade for mutual benefit.
According to one of the main points of the memorandum, the PTA will ensure that tea imports from India to reach a level of 25 million kg over the period of 2004-2005 to 2006-2007.
"No deal, contract or agreement have been struck between the local and Indian packers and blenders in the last three days of Indian delegation visit to Pakistan," Chairman PTA, Saeed Ahmed Khawaja told Dawn on Saturday.
The MoU, he said, was simply a mutual understanding between PTA and ITA and there was no legal binding on PTA members to buy the Indian tea.
The Indian side was willing to strike a deal with local blenders and packers but the issue of high price and quality remained a cause of concern during the entire visit of the Indian side, he said adding that leading local blenders and packers were buying limited quantities of Indian tea for blending purpose and they would definitely purchase in future as per their requirements. However, he ruled out the possibility of buying Indian tea in bulk quantities in future as local consumers had already developed a taste and aroma of Kenyan tea.
Khawaja said that the Indian side had also got the opportunity of tasting Unilever's Yellow Label and Tapal tea. They reckoned a vast difference in taste as compared to Indian tea.
Actually, Indian producers had developed a wrong impression that their tea excels in taste and quality as compared to Pakistani tea, he added.
Coming back to the MoU, PTA and ITA would jointly take up and pursue with their respective governments towards inclusion of tea imports into Pakistan within the framework of a preferential/free trade agreement between Pakistan and India.
The ITA would ensure that its members address the task of reducing costs towards supplying suitable quality tea to Pakistan at internationally competitive prices.
ITA would take appropriate steps to render assistance to producers in India to facilitate tea exports to Pakistan while PTA would take similar steps towards facilitation of imports from India.
Both the associations would exchange relevant information in terms of production, exports, imports and tea prices, etc. They will also facilitate regular visits of buyers and sellers between the two countries.
Under the agreed MoU, any dispute would be mutually settled among the members of the PTA and ITA.
Five points of the current MoU are the exact replica of the previous MoU, signed in July 2003 between the two association. Indian side had also failed to strike any sale deal with Pakistani blenders in the last year's visit to Pakistan, but later on, tea trade between the two countries gradually improved after ascertaining the quality and prices.
Around seven million kgs of Indian tea had arrived in Pakistan during July-April 2003-2004 as compared to three million kgs in the same period of 2002-2003.
Saeed said that the current 11-member delegation had come from the North India where tea prices were quite high. The landing cost in Pakistan is estimated at Rs180 per kg as compared to Rs75-80 per kg of South India's tea.
"I have informed the delegation that local blenders do not intentionally avoid Indian tea. We are more concerned about the high prices," he said.
Source