Production may not reach 1,000 m kg
Tea production may not cross the 1,000-million kg mark this year though there has been a substantial increase in production till September. Cumulative production for the year till September stands at 729.6 million kg as against 692.9 million kg in 2010.
Production in north India during the nine months is seen higher by 41 million kg when compared with the same period of 2010, while south Indian production is seen lower by nearly 4million kg. The country had produced 966.4 million kg of tea in 2010.
Temperature in north Indian gardens has been dropping since October which is likely to reduce production. In south India, erratic rains and a cold weather has led to a marginal decline in production.
Prices rule firm on steady demand
Robust demand from the domestic market has kept the prices firm. Domestic consumption is growing at the rate of 3.5%. The CTC tea price is ruling at Rs 128 per kg, which is higher by Rs 5 compared to the previous year. Even Darjeeling teas, which are generally exported, have fetched a good price at auctions as Indians are preferring quality teas due to a rise in income.
Companies like Tata Global, HUL, Wagh Bakri Group and western Indian buyers are still active at the auctions and are buying teas in good amount. In south Indian auction centres, arrival is up by almost 20%. The prices of CTC dust teas in the south Indian market have jumped by Rs 3-5 per kg supported by a robust internal demand.
Prices touched
Rs 93.5 per kg with premium varieties edging closer to Rs 100 per kg. Orthodox tea prices are, however, down by Rs 40 per kg as these teas have not been exported to Iran due to a payment problem.
Exports down due to payment problem
Indian exports are lower for the year despite a lower production in other countries. Exports during the January-September period is seen lower by 13 million kg at 130.28 million kg as against 143.48 million kg during the same period of 2010. "Payment problems with Iran and Iraq have not been settled.
Egypt is also lifting lower volumes. Tunisia and CIS are the only countries actively sourcing," a trader said. Tea exports during 2010 stood at 193.3 million kg.
Kenya output likely to fall 9% this year
Annual tea production in Kenya, India's immediate competitor, is expected to fall by about 9% as a result of frost and dry weather conditions this year. In the first nine months of this year, production is pegged at 259.3 million kg as compared to 289.3 million kg in the corresponding period of the previous year. Prices of Kenyan tea have gone up significantly and are fetching $2.95 - $3.60 per kg at the auctions.
Source : economictimes.indiatimes.com