Tea Board revises production figures

India is producing and drinking more tea than what the Tea Board of India had estimated till date. The board has revised upwards its production figures for 2011, which indicate that the earlier figure was lower by about 127 million kg. The revised production — which factors in the output from bought leaf factories — for 2011 is 1,115.72 million kg, compared to the earlier production figure of 988 million kg for 2011.

Bought leaf factories are essentially small growers who source two-thirds of the green leaf processed in their factories from other growers.

The Tea Board’s latest tally shows that production for 2012 is 1,111.76 million kg. Though lower by 3.96 million kg, it’s still above the billion kg mark and brings it closer to China, which of course, is a green tea market. China’s production till November 2012 stood at 1,737 million kg. Apart from the higher production, the data put together by the Tea Board suggest that a revision in consumption figures is imminent. So far, the industry estimate is an annual consumption growth of three per cent, which translates to 15-20 million kg increase each year.

“But production is exhausted, which means the increase in consumption, which includes inventory levels, could be higher by 30 million kg,” Indian Tea Association (ITA) additional vice chairman, Azam Monem, said. The pipeline stock is drying up and at least two auctions - one each in Kolkata and Guwahati - are likely to be dropped in March. Kolkata and Guwahati host auctions on a weekly basis. “The consumption growth was calculated loosely. Packet tea growth was estimated to be five per cent and loose tea two per cent. We (ITA) are now planning to collate data on consumption,” Monem said.

The supply crunch is reflected in prices with dusts and leaf selling at Rs 15-20 a kg higher than in the same period last year. According to industry representatives, even major packaged tea players were flocking to buy tea now. “There is a rush in buying as the next crop is expected in April. There is low inventory and low visibility,” Monem explained.