Indonesia's Import of Tea Posting Steady Growth

Tuesday, 30 September 2014

Although Indonesia was one of the biggest producers of tea in Asia, it was undeniable that Indonesia was also dependent on import of tea. Import of tea by Indonesia was necessary to cover up need for tea in Indonesia. Low quality of Indonesia’s tea reason for the Government to import tea. By importing tea, the local tea industry had to struggle to compete. Under such circumstances many tea farmers choosed not to grow tea anymore and changed profession.

Report of the Indonesia Council of Tea [DTI] stated that less certification made volume of imported tea to storm in. Every year tea producers supplied need for the domestic market and export to the amount of 20,000 tons. Domestic tea had been under preassure by imported tea from world’s tea producers in Asia, USA Europe. Around 10.000 tons of imported tea entered the domestic tea each year.

Chairman of DTI Rahmat Badrudin stated in Jakarta on Tuesday [9/9] that one way to wall out import was to urge the Government to enhance certification system. He said that certification must be applied on imported and local product alike. Certification must include product testing, plantation management and factority operations. As with imported products, certification was not too far different but focus was more on importers. Today he and the Government and the Indonesia Tea Indonesia [ATI] were scheming up non tariff barrier like Halal certification.

For information, price of local tea was around USD 1.7/kg while price of imported tea, especially from Vietnam, was only USD 0.9/kg. Therefore Rahmat demanded that tea imported to Indonesia should be high quality tea. Most tea imported from Vietnam, Sri lanka and Kenya were low quality tea. For that matter local farmers were reluctant to plant tea. While they were also trouble by high production cost, fertilizers cost etc. certification was also designed to run fair trading. So far Indonesia’s tea product was exported, while paying high import tax also had to face non tariff barrier in buyer countries.

For the mater, Indonesia would be applying non tariff barrier in the form of Certification for imported tea commodity. This was meant to wall out storming import of especially from Vietnam. He disclosed that today the Government with DTI and ATI was scheming up non tariff barrier in the form Halal Certificate. “The certification was to check whether the products meet Indonesia’s quality standard or not” he said.

Certification was also to implement fair trading. So far Indonesia’s tea products exported, while having to pay high import tax also had to face non tariff barrier in buyer countries. He claimed that today all big plantations already applied the certification.

To quote data of BPS, total import of tea through January-July 2014 was 9,249 tons or USD 14.8 million. Vietnam’s portion was 3,539 tons or USD 3.9 million. imported tea amounted to 500 – 600 tons per month. Besides tea was also imported from Kenya amounting to 1,254 tons or USD 3.9 million, India 984 million tons, Iran 2,255 tons or Rp. 1.7 million, Sri Lanka 208 tons or USD 1.5 million and other countries 1,007 tons or USD 2.9 million. (SS)

Source: Kusnandar & Co