India experiencing shipping container shortage
By Dan Bolton
A scarcity of shipping containers compounds the sharp decline in the tea harvest, making it impossible for India to equal its 2019 export totals.
Anshuman Kanoria, chairman of the Indian Tea Exporters Association (ITEA) observes that the 252 m.kg exported last year will decline to between 180-185 m.kg in 2020. Exports earned US$830 million in fiscal year 2019 but only $709 in fiscal year 2020. India’s fiscal year begins in February.
Iran is now the largest importer of India’s orthodox teas, paying good prices for 55 m.kg last year. But this year exports to Iran are going to decline to between 30-35 m.kg “due to some payment problems with that country,” Kanoria told the Deccan Herald.
Customers are willing to pay higher prices in the domestic market due to scarcity caused by Covid-19 lockdowns and safety regulations that lower yield. The harvest declined to 1 million metric tons in mainstay northern India so far this year, according to PK Bezbaruah, chairman of Tea Board India and Tea Research Association.
India greatly curtailed imports during the past eight months, reducing the availability of containers. Now exporters must contend with prices doubling for shipments to the US. Shipping a container to Europe costs 60% more than last year and shipping a 20-foot container to West Africa now costs $2,200 compared to $1,000 paid pre-pandemic.
Imports fell 19.6% through September while Indian exports of plastics, rubber, and vegetables bounced back. Ships arriving from China must quarantine for 14 days, compared with 7 days for ships arriving from other countries. Quarantines interrupt the normal availability of containers by keeping millions of containers at sea.
“We are witnessing a very slow recovery of imports and it is difficult to predict how long it would take for the imports to reach the pre-Covid times,” Adhish Alawani, Maersk India spokesman, told the Financial Times.