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South India tea output set for fifth straight dip

Adverse climatic conditions like drought in first quarter and heavy rains in the second quarter have affected the tea output

Mahesh Kulkarni  |  Coonoor (Tamil Nadu) 

Tea production is set to decline in the growing regions of South India for a record fifth year in a row, owing to adverse climatic conditions. During the first six months of this year (January-June), tea production in South India declined 1.7 per cent to 115.4 million kgs from 117.4 million kgs in the same period last year.

At the same time, the states in North India reported 6.7 per cent increase in tea production at 280.1 million kgs from 262.5 million kgs in the same period a year ago.

“Going by the trend till now, it appears that we will have lower tea crop for fifth consecutive year in South India due to adverse climatic conditions,” said R Sanjith, spokesperson, United Planters’ Association of Southern India (Upasi).

As a result of better show by the states in North India, the overall tea production of the country has increased 4.1 per cent to 395.5 million kgs during the first six months of the year compared to 379.9 million kgs in the year ago period. For 2012, tea production in South India remained stagnant at 239.4 million kgs compared to 240.2 million kgs in 2011.

Southern states comprising of Tamil Nadu, Kerala, and Karnataka account for 21 per cent of the country’s annual output. The total output during the year was 1.12 billion kgs, a growth of 1 per cent over the previous year.

“In South India, during the first three months of this calendar year, we have seen drought and heavy rains accompanied by overcast conditions in the second quarter, which is not conducive for the crop. The yields were also lower this year as many planters have gone for replanting of their estates. The yield levels might improve in the next couple of years,” Sanjith told Business Standard on the eve of the 120th annual conference of Upasi atop the hill town Coonoor.

In South India, the crop in the second half of the calendar year (July to December 2013) is also anticipated to be lower on account of the heavy showers and overcast conditions that prevailed during June and July, he said.Despite higher tea output on all India basis, the prices have moved up at the Indian auction centres continuing their upward movement that started in 2012. During the January-June period this year, the prices have jumped 13.2 per cent to Rs 128.86 per kg at the national level. While in South India, the prices have recorded a robust jump of 23 per cent to Rs 102.65 per kg for all teas put together.

“The year 2013 started with supply and demand reasonably balanced and therefore market fundamentals suggest that the market will neither be particularly bullish nor bearish in outlook. The markets may move in a narrow price band close to current levels,” Sanjith noted. The price hike despite higher production and lower exports indicates a robust growth in domestic consumption. Coupled with higher supply in the world market, the price increase suggest a healthy trend in the sector, absent for many years he added.

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First Published: Sun, September 01 2013. 20:31 IST