Tata tea rise even as tea exports to stay low

The possible downfall in exports in the tea industry might not have adverse impact on the Indian tea industry, as the domestic demand is strong enough to drive past the recessionary period.

A fall in the exports to Russia had raised the concerns of the tea traders across the country, as the buyers in Russia are delaying their purchase decisions due to credit crunch.

According to Tea Board estimates, there could be some deferments in the short term. However, experts see an increase in the consumption of Indian CTC teas as the recession-hit consumers would switch over to consuming tea from other costlier beverages. A general perception says that people consume more tea staying at home. But some costlier varieties like the Darjeeling tea would have an adverse impact.

According to available figures, tea exports for the CY 2008 stood at 196 million kgs an increase of 10% from 178 kgs in 2007. But for the fiscal year-ending March 2009, the exports could fall short of targeted 210 million kgs.

Lack of timely rains too seemed to have impacted the Indian tea output in the January-March quarter. Country’s key growing areas including Assam had witnessed a dry spell of six months from September to February during this year.

Tea stocks on the bourses traded positive today as one of the country’s largest tea makers, Tata Tea Ltd was trading at Rs.552 up by close to 1.5%, while CCL Products India Ltd traded at Rs.63.25 up by 1.5% on the BSE. Tea exporter and trader, Bombay Burmah Trading Company Ltd was treading high at Rs. 129 up by 7.5% during the afternoon trading hours on the BSE today.