Cut in duties will curb tea smuggling: report

The cut in customs duties on tea imports, announced by the government in the Federal budget for the 2004-05 fiscal year, will curb the smuggling of this important commodity.
It was observed in a report carried by the Financial Times Asia.
The report said: "Pakistan's tea traders are convinced, the smugglers who dominate the imports into South Asia's largest tea importing country are likely to go out of the business after sharp cuts in import duty."
According to the paper, the cuts have been made in response to demand from local tea importers, who believe lower duties will put smugglers out of the business by taking away their edge on legitimate imports.
Pakistan imports almost all the 140 million kilograms of the tea, it consumes annually. Almost one-third of that tea is smuggled from countries such as Kenya, tea importers claim.
One method that is used has been to import tea in consignments marked for neighbouring Afghanistan under a transit facility allowed by Pakistan for its Central Asian neighbour.
"Once such consignments cross the border on the land route from Pakistan to Afghanistan, they re-enter Pakistan through the largely porous border, with the connivance of corrupt customs officials," the report said.
"For years, genuine tea importers have not been able to compete with the smugglers," the report quoted Pakistan Tea Association President, Saeed Ahmed Khawaja, which represents growers as saying.
"The new financial year would be the first time ever that the government had clamped down on smuggled tea," General Manager at Tapal Tea, Mohsin Saifee agreed.
"With lower custom duties, we are entering a new phase in our business," he said and added, "Smugglers are likely to go out of the markets."
Pakistan, with a population of about 140 million, remains an attractive destination for the tea exporters. Black tea from Africa makes up more than 90 percent of the imports while green tea imported from parts of Asia such as Indonesia and Vietnam accounts for the tea.
In recent months, Pakistan's local tea markets have been dominated by speculation that Indian exporters were keen to establish a foothold. However, Khawaja believed that Pakistan's consumers had become so used to African tea that switching to Indian tea would be difficult, the report said.
"For 57 years, he said, we have not had the taste of Indian tea. It is now hard for our people to adjust their tastes," the report added.