Tea season to end in 15 million kg shortfall

At the end of this season, the tea sector might record a shortfall of 15 million kg, owing to unfavourable weather.

A shortfall in production has led to higher prices for good varieties. This year, the average price of CTC tea is Rs 146 a kg, against Rs 137 a kg last year. Though prices are expected to remain firm, lower export might limit the impact on overall price trends.

In October, cropping was lower by two-three million kg and November and December were likely to see a further fall of five million kg, said representatives from the sector. The poor cropping is a major concern in Assam. The Dooars region accounts for about 20 per cent of the production in north India.

“There has been no rain since October,” said Azam Monem, vice-chairman of the Indian Tea Association.

Despite lower production, auctions in Kolkata, Guwahati and Siliguri were on course which, Monem said, could be attributed to lower exports. Till recently, exports were down about 10 million kg. Data by the Indian Tea Association showed in September, exports were down 2.2 million kg.

“This year, exports could be lower by 25 million kg,” Monem said. This is primarily due to India recording poor cropping in May-August (the prime period for exports) and Kenya registering record high production, affecting CTC-consuming countries such as Pakistan and the UK.

For the second consecutive year, Kenya clocked in record cropping. Last year, Kenya produced 432 million kg. As a result, the country sold 40% less tea and prices have crashed, making it a cheaper alternative to Indian tea. Exports to Russia and Iran have been hit, as India produced less orthodox tea in the first six months of the year. Last year, exports from India stood at 219 million kg.