Tea season starts on a strong note

Good varieties of Assam tea are sold at Rs 200-250 a kg, against Rs 180-200 a kg a year earlier

This tea season, prices have recorded a rise of Rs 30-50 over the corresponding period last year. Through the last few days, private sales of medium-grade varieties of Assam tea recorded prices of Rs 180-220 a kg, compared with Rs 150-180 a year ago. Good varieties of Assam tea were sold at Rs 200-250 a kg, against Rs 180-200 a kg a year earlier.

Industry veterans expect this season, prices would settle at Rs 25-35 more than prices in the previous season. This year would see an average price rise of Rs 15-20 a kg, they say. "It's a late start for the season. But the weather conditions are good and we expect the increase in prices to be in the range of Rs 20 a kg. There has been good rainfall over the past few days, but there should not be too much rain," said Aditya Khaitan, managing director of McLeod Russel (India). McLeod is the world's largest bulk tea producer.

"End-season teas were selling Rs 20-30 a kg higher. We expect this momentum to continue," said Azam Monem, additional vice-chairman of India Tea Association. From early April, it is expected more new-season teas would come into the market.

The season started with a pipeline deficit of about 100 million kg. Recently, the Tea Board of India had revised its 2011 production figures upwards. The revised production, which also takes bought-leaf factories into account, stands at 1,115.72 million kg, against 988 million kg earlier. Bought-leaf factories are small growers who source two-thirds of the green leaves processed in their factories from other growers.

"We believe in India consumption has been growing at a level higher than calculated earlier," Khaitan said. Till recently, the industry estimate for growth in consumption was three per cent a year.