Tea auction prices inch up by Rs 6.28/kg

However, the difference over last year's prices was higher for the north Indian tea with the average tea price being Rs 77.60 per kg, up Rs 10.11. Among north Indian auctions, Jalpaiguri tea averaged the highest price at Rs 80.11 per kg, an increase of Rs 14.60.

Availability across the country was higher by three million kg at 151.1 million kg. However, availability of north Indian tea was down by eight million kg.

 

Prices were still below the peak levels of 1998 at Rs 84.44 per kg.

Aditya Khaitan, chairman ITA said, tea prices should see a new threshold for the survival of the industry either this year or next and the cost of production has to be offset by price increase.

He pointed out that since 2001-02, cost of production has increased by Rs 21.45 per kg under various heads of wages, security, power, fuel, among others.

"If we take normal inflation, then tea prices should be around Rs 100 per kg, so we have a long way to go," said Khaitan.

However, one respite for the industry was that the demand-supply gap was increasing, which could augur well for prices.

Statistics show that production in North India during January-May was higher by 2.2 million kg at 142.9 million kg. South India was much higher at 97.4 million kg, an increase of 11.6 million kg.

The tea industry is also banking on lower crop in Kenya to increase exports. The Kenyan crop during the first five months of 2008 was down by 21.5 million kg. Though Indian export was higher by only 3.4 million kg, it is expected to pick up in the second half of the year.