The Tea Board has not yet announced the target for tea exports in calendar 2009 or fiscal 2009-10.
But, indications are that as of now, there is not enough volume to improve over last year’s export performance.
According to the latest information available with the Tea Board, in the first two months of calendar 2009, exports fell to 24.72 million kg from 33.02 million kg in the corresponding period last year.
So, despite the price rising by as much as Rs 25 a kg to average Rs 120.97, the overall earnings dropped to Rs 299 crore from Rs 318 crore last year.
Low realisation
With both volume and earnings dropping, 2009 is causing concern to exporters.
If this trend continues unchecked, exporters will lose around Rs 120 crore when the year ends, compared to last calendar.
This is a case of price-rise not pleasing the exporters because the rise is due to short supplies, and not activated demand, resulting in lower overall realisation.
Global purchases
In the recent weeks, Egyptian purchases had been weak with selective picking of CTC medium dusts and exporters complained of inadequate volume of their choice teas.
Pakistan had been choosing limited volume of blacker grades.
Iraq had been confining to leafy orthodox brokens. CIS and Poland had been supporting blacker cleaner medium teas. There had been no significant purchases for other destinations.
Domestic supplies down
In the first two months, India’s supplies were down by 2.54 million kg as production dipped to 36.84 million kg from 39.38 million kg last year.
Although the bulk of North Indian crop hits the market only by April, in the first two months, it rose by 3.75 million kg to reach 13.20 million kg. But, this increase was neutralised by the sharp fall of 6.29 million kg in the South to dip to 23.64 million kg.
Given the reality that India needs more than 80 per cent of its production for home consumption and 2009 has begun with no mentionable carry forward stock, the lower production has reduced the supplies for export.
Prolonged frost and drought are responsible for lower output.
Source : Business Line