India's tea exports in January fell 11.7 percent due to sluggish offtake from Iraq and rising domestic consumption, a senior Tea Board official said on Thursday.
Tea exports during the first month of 2008 stood at 13.77 million kg, compared with 15.59 million kg last year, Basudev Banerjee, chairman, Tea Board of India, said.
Exports from south India dropped 22.7 percent to 5.94 million kg, while that from north India was marginally down at 7.83 million kg.
"Remittance problems in Iraq has led to fall in exports. Exports have almost been wiped out," he said.
Figures for exports to Iraq in January were not available, but India exported about 10 million kg in 2007, sharply down from 41.33 million kg in 2006.
Rising domestic consumption has also impacted exports, said Kamal Baheti, director of McLeod Russel India Ltd.
Indian consumption is seen rising to 797 million kg in 2008 from 780 million last year, according to the Tea Board.
India, the world's second largest tea producer, is trying to increase exports to Russia and expects prices to rise on lower global production, Banerjee said.
The country, which mostly exports orthodox tea to Russia, is targetting about 130 million kg by 2012 from about 93 million kg last year, Banerjee had said in early February.
Orthodox tea is of a higher quality than CTC (curled-torn-crushed) and is mostly exported.
Exports to Pakistan are also likely to rise in coming months due to a production shortfall in Kenya, Baheti said.
Kenya's tea output fell 29 percent in January to 29.7 million kgs due to dry weather. However, India's output during the period rose marginally to 21.62 million kg from 21.24 million kg a year ago.
India exports tea mainly to Iraq, Pakistan and Russia. Area under tea plantation is estimated at about 521,500 hectares. About 130,000 growers and 1.26 million workers are associated with the industry