An official at the Pakistan Tea Association has alerted the public that the availability of tea in the country could be greatly impacted if the 300 containers of tea currently held at the Karachi port are not released.
The official stated that if the authorities fail to act, tea may become a “rare commodity” within the next month.
The high demand for tea in Pakistan has made it the largest international importer of the product in the world, with an annual spend of over $600 million.
The Pakistan Tea Association, which represents the country’s tea importers, reported that Pakistan imports a staggering 250 million kilograms of tea each year, highlighting the crucial role that tea plays in the country’s economy and daily life.
The crisis in Pakistan’s $350-billion economy has resulted in a shortage of foreign exchange reserves, dropping to less than three weeks of import coverage.
The government’s response to the crisis has been to restrict imports, including crucial industrial raw materials, causing difficulties for importers.
Adding to their struggles, commercial banks have also ceased issuing letters of credit, making it even harder for importers to secure the necessary funding for orders that have already been placed.
The impact of this crisis on the tea industry, along with many others, will likely be significant.
A top official from the Pakistan Tea Association (PTA), Aman Paracha, has warned of a potential tea shortage in the country if the 300 containers of tea that are currently stuck at the Karachi port are not released.
Paracha stated that tea is such an integral part of Pakistani daily life that without it, many people would struggle to survive.
According to Aman Paracha, the containers of tea have been at the Karachi port for approximately a month.
The Pakistan Tea Association (PTA) was advised by the central bank to request the release of the containers on a deferred payment basis, but this request has yet to yield results.
He added that a restriction has been imposed, only allowing Bill of Lading up until January 18 to be considered, which has further complicated the situation.
The delay not only threatens to create a tea crisis in the country, but it is also causing significant losses for the importers, who are charged $120 per day as a detention fee. The issue highlights the need for prompt action to resolve the situation and prevent further financial losses.
A spokesperson from the central bank, Abid Qamar, stated that he was unaware of the request made by the Pakistan Tea Association (PTA). However, he indicated that officials from the central bank have asked the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to communicate the details of all associations’ stuck containers to the State Bank of Pakistan, so a solution can be devised.
Qamar explained that the central bank cannot address each association individually, which is why they asked for the FPCCI’s involvement. He reassured that the bank is committed to resolving such issues on a priority basis.