Production of high value first flush tea likely to drop this March

Erratic weather, especially delayed rains, and increased pest proliferation likely to affect output, push up auction prices

Erratic weather -- delayed rains in particular – and increased pest proliferation are likely to cast a shadow on the production of high-value first flush tea in north West Bengal and the adjoining sub-Himalayan region. Small tea growers estimate that this year at least 40% of the first flush crop might show a downward trend.

A labour strike at Kanan Devan Hill Plantations last year, combined with frost in the Nilgiris this year, have already put pressure on tea supplies in southern India.

While these event are likely to send tea prices northwards, the industry remains optimistic, saying that it is too early to comment on price movements in the coming auctions.

February-March production so far is already lower by almost 50% compared to the same period last year, pointed out to B G Chakroborty, president of Confederation of Indian Small Tea Grower's Association (CISTA). Overall, around 40% of the first flush crop would show a downward trend, according to CISTA.

In 2015, Chakroborty said, North Bengal produced around 355 million kg of tea, of which the small tea growers produced around 131 million kg. 

First flush production, accounts for nearly 20 per cent of the production in the Terai, Dooars and Darjeeling belt but about 35% in terms of value, requires adequate winter time rainfall.

“This year, however, since September this region has not seen any rains, and we are dependent on artificial irrigation to survive the plant," he said, adding that pest infiltration is also high, which could affect the crop.

Piyush Desai, chairman of Wagh Bakri Group and president of Western India Tea Dealers Association is inclined to agree that there will be an impact on tea production this year in the sub-Himalayan zone due to prevailing weather conditions. The trans-Himalayan region accounts for nearly 28% of national tea production.

"However, first flush production also happens around April, and there is still some scope for rains before that," he added.

Desai also added that a leading private tea garden owner has shut down around 70 gardens in the region, which would also have an impact on production.

More than 250,000 small tea growers (STG) cultivate tea in the states of Assam, Tamil Nadu, West Bengal, Kerala, Arunachal Pradesh, Meghalaya, Tripura, Mizoram, Nagaland, Himachal Pradesh. And together they contribute nearly 38% of India's tea production. STGs sell their tea to Bought Tea Leaf Factories (BLF). There are about 458 BLFs across India; of these, north West Bengal has about 141 functional BLFs.

Chakraborty said that last year the average price realisation for STGs in North Bengal was around Rs 10.5 per kg, while the cost of production was around Rs 11.5 per kg. While it is too early to comment on prices for the season, he said, there could be some firming up. 

Subrata Roy, business advisor to the tea division of Aditya Birla Group and an industry veteran, however, pointed out that Assam production is steady, and could compensate for the loss of production, if any, in the other regions.

TEA PRODUCTION AND EXPORTS
YEAR	PRODUCTION (million kg)	EXPORT (million kg)
2013-14	1208.78	225.76
2014-15	1197.18	197.81

 
(Source: Tea Board of India)