Tuesday, August 02, 2005
Cut in duty increased tea imports by over 10%
By Imran Ayub
KARACHI: Tea imports during 2004-05 increased by over 10 percent compared to 2003-04 mainly due to a cut in the import duty, but traders have said the imports may decline this fiscal due to increasing smuggling from neighbouring countries.
Importers said the last fiscal year’s tea imports cost around $200 million, which stood at $187.63 million during 2003-04. Kenya topped among the main suppliers of tea to Pakistan as the African country contributed 65 percent of total tea offloaded during 2004-05. “But the trend is not likely to continue this fiscal,” said Muhammad Altaf Borra, chairman of the Pakistan Tea Association. "Smuggling and illegitimate trade from neighbouring countries is increasing with each passing day, which affects the total import figures and bring losses to the exchequer.”
He said that during 2004-05, 130 million kilograms of tea was imported, which was 10.16 percent higher than the 118 million kilograms of tea imported during 2003-04, cushioned by a major duty cut in the last fiscal budget.
The federal government in the budget 2004-05 cut by 50 percent the import duty on tea, bringing it down from 20 percent to 10 percent to what it said protect the local industry and curb the menace of smuggling.
Pakistan, which on average imports around 120,000 kilograms of tea every year, is the third largest consumer of tea in the world. The country's tea market comprises 45 percent of loose tea and 55 percent of packaged product.
Importers for the budget 2005-06 proposed that tea imports be liberalised, so that the unbridled smuggling of the commodity mainly from Afghanistan could be checked, but the proposal was not considered.
“Only during the first 10 months of the last fiscal, tea smuggled into Pakistan through Afghanistan stood at 20 million kilograms, which was of African origin,” said Saeed Raza, a tea importer and a senior...