Tea production in India will be marginally lower this year than in the year before due to erratic weather, says Tea Board of India chairman Basudeb Banerjee.
"This year our production has been slightly lower than last year. We will be marginally down by 10-15 million kilograms this year (by the end of the season -- first week of December)," Banerjee told IANS.
The production last year was 981 million kg.
"There were times during the season when unseasonal rains or lack of it hampered the crop. Erratic weather played a crucial role," he said.
On the spiralling tea prices, Banerjee said overall prices are up by 30 percent over last year's average.
"Average prices of South Indian tea, which was Rs.60-70 per kilogram last year are now around Rs.100 per kg. Average prices of north Indian (Darjeeling, Assam) tea that was around Rs.100 per kg is now around Rs.130 per kg," Banerjee said.
The rising prices can be attributed to the behaviour of the international traders on demand-supply pull and secondly the higher wages paid to the labourers.
He traced the origin of the all-round price rise to the drought and political problem in Kenya two-three years ago, and added this year the traders expected there could not possibly be two droughts in a row.
Production cut in Kenya and Sri Lanka due to drought and a drought-like situation in India to a limited extent led to the overall shrinkage of tea availability.
"International traders were probably a little confident that tea stock availability would not be low this year. But eventually their stocks ran low. Now when stocks are low and the supply pipeline is drying up (due to drought) there is a demand-supply mismatch," Banerjee said.
Talking about tea consumption in the country, he said it is growing satisfactorily.
"In India, consumption has gone up. Till last year tea consumption growth rate was more than three percent, as against 1.8-2.4 percent in the last few years of the 21st century."
The tea industry has remained largely insulated-from the global economic meltdown as internationally people consume more tea during a recession since this is a cheaper beverage, he said.
"Nevertheless, higher end tea has suffered due to the meltdown."
Out of the 981 million kg produced last year, around 200 million kg were exported. But at present the export market is not doing too well.
"The export market is not doing too well in terms of physical quantity. A five-six percent decline has happened in export, but we have made up as the unit cost has increased," he said.
Total global supply of tea was 3,749.78 million kg in 2008
lcbl Market Report
2009.12.02
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