Rain, poor sunlight likely to hit tea output in South

Persistent rain and low sunlight are expected to take toll on South Indian tea production. “Rains are often good for the tea crop but they should be interspersed with consistent sunshine to facilitate good plucking operations,” said an official of the United Planters Association of Southern India (UPASI). South India's tea production till July was down by close to 3.6 million kg on account of lower production in all the States. The only saving grace was that production from Nilgiris, which account for more than 50 per cent of Tamil Nadu's production, had not been affected. But all that seems to be changing now. “Unlike the previous months, production shortfalls are expected from the Nilgiris region as well in August. With persistent rain continuing into September, the production shortfall period could be further extended in this region,” Mr R. Sanjith, Head of Commodities, UPASI, said. July tea production in South India, and Tamil Nadu in particular, was higher due to higher output from the Nilgiris region, though lower production was reported from Kerala and other parts of Tamil Nadu. South Indian tea prices in general have been picking up in recent months, remaining just a notch above last year's levels. Last financial year ended with tea prices ruling firm to dearer at South India's auction centres. During the first quarter of the current year, prices were a tad lower than last year, although not very significantly. Prices have been rising further during the second quarter and the trend is likely to continue in the coming months. What has been holding the price line has been the lower production from South India. This was despite a huge increase in north Indian tea production by 33 million kg till July 2011. As the two regions, North and South India cater to different segments of the international markets and different taste segments in the domestic market, prices have not been overtly affected. The huge production shortfall reported from Kenya — estimated at 35-36 million kg — has also helped to keep international prices firm. While earlier reports had indicated that Sri Lankan production had not been much affected, more recent reports suggest that there could be shortfall of 1-1.5 million tonnes from the island nation. This could also go to strengthen the international prices in the short run.

Tea output in first seven months up 6.37%

India's tea production in the first seven months of current calendar has increased by 6.37 per cent over the same period of last year, reveals an analysis of the latest data available with Tea Board and producers' organisations. Between January and July, production increased to 491.59 million kg (mkg) from 462.16 mkg during Jan-July 2010. This increase of 29.43 mkg marks a growth of 6.37 per cent. The increase would have been more had it not been for a decline of 3.60 mkg in South Indian production. North India posted a gain of 33.03 mkg. North Indian output rose by to 348.14 mkg from 315.11 mkg. Assam continued to dominate India's tea map with a production of 234.32 mkg (last year: 204.50) accounting for 47.67 per cent (44.25 per cent) of the country's overall output. West Bengal's production increased to 110.38 mkg (107.33) of which, the share of Darjeeling tea, hailed to be the tea champagne, was 4.99 mkg (4.20). South India's production dropped to 143.45 mkg from 147.05. Tamil Nadu's output declined to 100.19 mkg from 103.27 mkg. Kerala and Karnataka also posted lower production. Source: Business Line

India Tea production marginally low this year

Tea production in India will be marginally lower this year than in the year before due to erratic weather, says Tea Board of India chairman Basudeb Banerjee.

“This year our production has been slightly lower than last year. We will be marginally down by 10-15 million kilograms this year (by the end of the season — first week of December),” Banerjee told IANS.

The production last year was 981 million kg.

“There were times during the season when unseasonal rains or lack of it hampered the crop. Erratic weather played a crucial role,” he said.

On the spiralling tea prices, Banerjee said overall prices are up by 30 percent over last year’s average.

“Average prices of South Indian tea, which was Rs.60-70 per kilogram last year are now around Rs.100 per kg. Average prices of north Indian (Darjeeling, Assam) tea that was around Rs.100 per kg is now around Rs.130 per kg,” Banerjee said.

The rising prices can be attributed to the behaviour of the international traders on demand-supply pull and secondly the higher wages paid to the labourers.

He traced the origin of the all-round price rise to the drought and political problem in Kenya two-three years ago, and added this year the traders expected there could not possibly be two droughts in a row.

Production cut in Kenya and Sri Lanka due to drought and a drought-like situation in India to a limited extent led to the overall shrinkage of tea availability.

“International traders were probably a little confident that tea stock availability would not be low this year. But eventually their stocks ran low. Now when stocks are low and the supply pipeline is drying up (due to drought) there is a demand-supply mismatch,” Banerjee said.

Talking about tea consumption in the country, he said it is growing satisfactorily.

“In India, consumption has gone up. Till last year tea consumption growth rate was more than three percent, as against 1.8-2.4 percent in the last few years of the 21st century.”

The tea industry has remained largely insulated from the global economic meltdown as internationally people consume more tea during a recession since this is a cheaper beverage, he said.

“Nevertheless, higher end tea has suffered due to the meltdown.”

Out of the 981 million kg produced last year, around 200 million kg were exported. But at present the export market is not doing too well.

“The export market is not doing too well in terms of physical quantity. A five-six percent decline has happened in export, but we have made up as the unit cost has increased,” he said.

Total global supply of tea was 3,749.78 million kg in 2008 vis-�-vis a demand of 3,603.25 million kg. Total quantity of tea exported in 2008 was 203.12 million kg clocking a value of $551.17 million. This year till September 131.23 million kg has been exported for $362.83 million.

The major countries India exports to are Russia, Iran, Iraq, Egypt and Pakistan. These countries consume CTC (curl, tear, crush) variety.

“It is our endeavour to sell more CTC as there is a risk in manufacturing more orthodox type because if we can’t sell it abroad we don’t have a domestic market to sell it,” he said.

Banerjee said Britain and Russia consume more CTC from India as tea bags are very popular there.

He emphasised that India needed to produce more orthodox tea as that is consumed abroad. “We are not an export-oriented country, 80 percent of our product is consumed domestically.”

To catch the fancy of orthodox tea drinkers, it is important to change the ratio of the quality of tea exported. “India is a bulk exporter of tea — the ratio between bulk and value-added tea has to change.”

Banerjee mentioned that shipping and transportation costs are the biggest hurdles in the export route as the production areas are located in remote regions.

Talking about branding of export tea, Banerjee asked: “Does the brand come first or the product come first? High quality tea export of India is much lower than other exporting countries like Sri Lanka and Kenya.”

“We need to create infrastructure before we start branding our exports like what Sri Lanka did, pack for foreign brands. It is not easy to create a brand. Value of bulk exports has to go up and proportion of value-added tea and bulk exports has to go up.”

Union Minister of State for Commerce and Industry Jyotiraditya Scindia on a recent visit to the city had said: “We require product diversification. Moving away from CTC to orthodox. There is need to produce quality tea for export markets, which is why rejuvenation and replantation work is very important in the tea gardens.”