Tea output rises 23%; exports up 11% in Jan-Feb .

Kochi, April 7 The year has begun on a promising note for the tea sector, with production growing 17 per cent in February. The volume and value of exports as well as unit value realisations increased last fiscal.

Falling trend

However, the growth in tea production has not been uniform, with production from all the northern regions – Assam Valley, Cachar, Darjeeling, Dooars and Terai – witnessing falling trends over last year. Production spurts have been reported from the southern regions of Tamil Nadu, Karnataka and Kerala.

Tea production increased to 17.9 million kg (mkg) in February against 15.3 mkg last year. The output in the first two months increased 23 per cent to 45.1 million kg.

Reason for spurt

The sharp increase in production was backed by output from South Indian plantations rising 11 mkg. North Indian production fell 2.9 million kg.

The primary reason for the spurt in production in South India during January-February was the absence of frost during the winter months and fairly good showers during December, resulting in the sprouting of new leaves in the succeeding period, sources in United Planters Association of Southern India (Upasi) said.

Production is unlikely to rise any further due to the absence of rains and the scorching heat during March. Fairly widespread rains were reported from the planting regions of Kerala and isolated pockets in Tamil Nadu last week, which could augur well for the April crop, sources added. Although export volumes remained relatively unchanged in February, the January-February months recorded smart gains. Export during the first 11 months of the 2009-2010 fiscal grew 2.5 per cent in volume to 182 mkg (176 mkg).

This was backed by a good rally in global prices and the unit value realisations increased over 10 per cent. As the unit value rose to Rs 137 (Rs 124), the export realisation moved up 14 per cent to Rs 2,504.70 crore during the 11-month period.

PRICE TREND

Domestic prices will depend partly on the north India production trends in the coming months and the direction of global prices, sources in the UPASI said. Backed by good rains, both Sri Lankan and Kenyan tea production is expected to be robust this year. Although tea prices have eased marginally in the recent past, future trends will emerge as estimates of global output become available.

Source : Business Line