India 2010 tea export seen hit by rain, low temprature.

KOLKATA: India's tea exports, which rose steadily in the first four months of 2010, are expected to be hit by excessive rain and low temperatures in north India, a top official of Indian Tea Association said on Thursday.

"Production has been severely affected in Assam, due to excess rain and low temperature during May and June. This might effect the overall production and export targets for the current year," Aditya Khaitan, Chairman, Indian Tea Association, told Reuters.

India's total exports in 2009 fell 5.7 per cent to 191.5 million kg, but the trend reversed in December when they rose 36.9 per cent to 22.24 million kg for the month, Tea Board data showed. During the Jan-April period, total exports jumped 20 per cent to 60 million kg compared to 49.8 million kg in the same period last year and various industry estimates indicated that exports during 2010 could cross 205 million kg.

India exports CTC (crush-tear-curl) variety of tea mainly to Egypt, Pakistan and the UK and the premium orthodox variety of tea to Iraq, Iran and Russia. Total production in Jan-April was up 12 per cent to 162.3 million kg from 144.5 mln kg a year ago, Tea Board data showed. "Though the industrywise data is still awaited, going by the production figures of McLeod Russel , at present, this excess crop of till April has been nullified and we are further down compared to last year," Khaitan, who is also the managing director of McLeod Russel, said.

In north India, which mainly includes the Assam Valley, the largest tea growing region in the country, the total production during the first four months of 2010 stood at 88.1 million kg compared to 80.2 million kg a year ago, an excess production of 7.8 million kg, Tea Board data showed. "Going by the present scenario, I don't see India's total tea production during the current year going up, it could even be lower compared to 2009," he added.

McLeod Russel, India's largest tea producer and exporter, manages 47 tea estates in Assam Valley and produced more than 80 million kg of black tea during FY10. Faced with severe drought in the major tea producing areas during 2009, India's total tea production fell marginally to 978.9 million kg from 980.81 million kg in 2008. This year, going by the normal weather conditions during Jan-April, the industry expected total production of 990 million kg, a Tea Board official said on condition of anonymity. "We are waiting for the final figures of June, and then if this trend continues we might have to revise our outlook downward for the year 2010," he added.

Though the extent of crop loss during May-June is not known, it is estimated to be between 20-30 per cent on a year-on-year basis, which would firm up the prices further, said D.P. Maheshwari, managing director, Jayshree Tea.

Tea prices, which showed signs of easing in April, are already moving northward in June, said a senior official of Calcutta Tea Traders' Association, who did not wish to be named. As per Tea Board data, during Jan-April, average tea prices across various auction centres was up by 2.46 rupees per kg, at 87.07 rupees, compared to 84.60 rupees a year ago.

"However, if we see the auction prices only for the month of April, the average tea prices stood at 86.37 rupees per kg, down by 12.84 rupees, from 99.21 rupees in the corresponding month a year ago," said S Patra, Jt Secretary, Indian Tea Association. One kg of quality tea was trading 15-20 rupees higher in the first two weeks of June compared to last year, Khaitan said.

"The total pipeline shortage which was 60 million kg at the starting of 2010, is expected to go up to 70-75 million kg during the start of next season, hence the prices will go up," Khaitan added.

Source : The Economic Times