Tea exports seen hurt by war

India's tea exports face a big setback due to the war in Iraq, its fastest-growing market, trade officials said on Friday.

"No insurer will touch a consignment of tea to Iraq in this situation. We are praying for a short war," said Gautam Ghose, director of A Tosh & Sons (India) Ltd, a leading exporter.

India, the world's largest producer and consumer of tea, has been focusing on newer markets like Iraq and Afghanistan after purchases by traditional buyers such as Russia, Britain and Germany slackened.

Exports rose six percent from the year earlier to 193 million kg in 2002, but that was lower that targeted. Sales to Iraq nearly tripled to 40.25 million kg last year.

"We are hoping it will be a short war," a top official of the state-run Tea Board of India said. "Otherwise, it will affect our overall exports this year."

"Iraq made up for the fall in exports to our traditional markets," said the official, who did not want to be named.

He said India, which sold tea to Iraq under the U.N. food-for-oil programme, must now wait for the fighting to end and also for the new set-up to restart exports to Iraq.

Tea output in India, which has been facing stiff competition from nations like Vietnam and Bangladesh, fell three percent to 826.2 million kg in 2002.