Indian tea exporters hope to cash in on drought in Kenya

India, the world's biggest tea producer, is hoping that a drought in Kenya will help boost its slumping sales.
India's 1.5-billion-dollar tea industry is slowly recovering from a crisis that caused prices to fall since 1998 and exports to drop as well, but now prices are firming, officials say.
In addition, countries that historically bought tea from Kenya are looking to India for supplies.
"A massive crop failure in Kenya due to drought has led to a gap of 30 million kilograms (66 million pounds) of tea in world markets," said Dhiraj Kakati, secretary of the Assam state chapter of the Indian Tea Association, the top administration body. "The drop in Kenyan tea output apart, overseas buyers are showing interest in Indian tea as we've been producing very high quality beverage," Kakati said.
Iran, Iraq, and Russia have shown interest and a Pakistani tea trader's delegation visited India last month and showed interest in a new Assam tea blend.
Pakistan is a key player in the market, importing 80 percent of its total domestic consumption of 140 million kilograms (308 million pounds) of tea - the bulk of imports coming from Kenya.
"We're doing some aggressive marketing," Kakati said in Guwahati, the main city in the north-eastern city of Assam, which accounts for 55 percent of tea production.
Tea production has been booming in India, rising 13.2 percent to a record 928 million kilograms (2.04 billion pounds) in 2005. But export fell five percent to 187.6 million kilograms (413 million pounds), according to the Indian Tea Board.
"India's tea industry is on a revival trend now and all indicators are very positive," said A. Sharma, a major planter in Assam.
The price and export slump has been blamed on cheap and inferior quality teas produced by new tea-growing countries that created greater global competition for India's premium quality teas.
A kilogram (2.2 pounds) of good quality Assam tea sold for 70 rupees (1.56 dollars) at auction last week while the average auction price last year was 62 rupees. Before 1998, good quality Assam tea sold for 90 rupees a kilogram.
Kenya's tea sector is rebounding from its searing drought but the Tea Board of Kenya has said the recovery is unlikely to make up for the drought-related shortfall that could see a reduction of up to 16 percent in output this year.