Tea Crop Shortfall A Blessing In Glut Situation

The tepid monsoon scenario was likely to be a blessing in disguise for the tea industry. According to a study by Centre for Monitoring the Indian Economy (CMIE), patchy rains should benefit the tea industry which has been struggling with excess supply and stagant demand.

Less than normal rainfall will affect production this year but with a sluggish demand and decreasing exports, it will create curtail supply in a market holding large stocks. This may lead to firming up of tea prices over some months.

The expected fall in the tea production in the current year would help reduce the demand supply imbalance. Tea production during January-June 2002 was 284.6 million kgs, 4.6 per cent lower than during the same period of 2001.

The fall has been attributed to shifts in weather patterns across tea growing areas. Production can be expected to record even sharper declines in the coming months.