Penetrating the Pakistani tea market with Sri Lanka orthodox tea will be a daunting task at present unless the gap of pricing between the African and Sri Lankan teas are minimized revealed a recent webinar held between the Sri Lanka High Commission and some tea importers in Pakistan.
During the webinar , it was revealed that Sri Lanka can plan to market value-added packet tea to the niche market in Pakistan with their orthodox teas provided that the production cost is bought down to be more competitive and with extensive advertising.
Sri Lankan exporters also may explore the possibilities of blending Sri Lankan tea with cheap CTC tea from East African countries and export them to Pakistan with a competitive pricing.
It was also emphasized during the webinar that Sri Lankan Tea (Ceylon Tea) that had a 75% of the market share in Pakistan in the seventies and early eighties has dwindled to less than point 0.1% at present and Pakistan is one of the highest tea importing countries and also has a very high tea drinking population.
The reason for dominating the tea market in Pakistan in the seventies and early eighties by Sri Lanka was the result of the Indo-Pakistan war in 1917 that halted tea that was brought in to then West Pakistan from its former East Pakistan or now Bangladesh.
With Sri Lanka capturing the Russian tea market of packed tea, the bulk tea prices too in Sri Lanka had sky rocketed, becoming unaffordable to be bought for blending with even African CTC for the Pakistani consumer.
Sri Lanka tea auctions are dominated by tea packers and Sri Lankan packed tea cannot compete with Pakistani packed tea due to their high price.
Even after-tax relief under FTA, Sri Lankan tea is non-competitive in price with East African Teas.
Small quantities of Sri Lanka tea had reached the Pakistan market during the recent years for the purpose of blending when there had been sudden spikes in the pricing of African CTC.
Northern regions of Pakistan consume orthodox teas without milk and Sri Lanka orthodox tea can have a market there if they can compete with the prices of other orthodox teas that are produced in Bangladesh and India.
Dilmah value added teas, that has a great market share in Europe, has not done well in Pakistan.
CTC manufactured by some plantation in Sri Lanka such as Hunnasgiriya had not penetrated the Pakistan CTC market as they are unable to compete in pricing with the East African CTC teas.
