Pakistan - rising tea import bills amid economic headwinds

In Fiscal Year (FY) 2024/25, Pakistan imported 246,514 metric tons of tea for USD629 million, marking a drop in volume of about 4.2 percent compared to the prior year, even as costs remained high.

During the first eight months of FY 2023/24 (July to February), tea imports rose by 10.13 percent in quantity compared to the same period the year before. Pakistan imported roughly 180,509 metric tons worth USD436.68 million, up from 161,056 tons valued at roughly USD395.49 million.

These figures reflect two pressures: growing consumption on one side, and exchange rate depreciation and inflation on the other, which push up the cost in rupees even when quantities are static or slightly falling.

Pakistan remains among the world’s top importers of tea. Despite efforts here and there to promote alternatives (green tea, herbal infusions, local cultivation trials), most of the demand is still for strong black tea blends, often imported. Consumption trends are further sustained by population growth, especially in cities, rising disposable incomes (even if under pressure), and the embedded habit of daily multiple cups.

Even though FY 24/25 saw a slight drop in imported volume compared to earlier years, the total cost remained high, owing to price escalations in particular.

As global tea prices increase, local consumers feel the pinch. Even if less tea is imported, the rupee value can rise heavily, which translates into steeper prices in the local market.

The rupee’s decline means that even if global prices are stable, the import cost in local currency swells. This makes tea more expensive domestically and increases pressure on importers, retailers, and ultimately consumers.

Source: Business Recorder (Extracts), Courtesy: Tea Exporters’ Association Sri Lanka