Tea industry optimistic

With the world tea crop reaching a demand-supply equilibrium and prices showing signs of improvement towards the end of the current year, Indian tea industry is optimistic that the four year old recessionary trend will gradually come to an end.

"2003 was the worst year in the history of the Indian tea industry as prices remained under pressure even though cost of production continued to rise. However, of late, in the last two months there has been some improvement in price realisation," CK Dhanuka, chairman of Indian Tea Association (ITA), apex body of tea manufacturers in the country, said.

He said the "worst is over so far as Indian tea industry is concerned. There appears to be an equilibrium in demand-supply position and that is the reason why prices are going up."

"If the current trend continues, of which I am confident, the industry will perform good and is going to grow during the next two-three years," he said.

Echoing the sentiment, tea expert RS Jhawar of Eveready Industries Limited said, "it (2003) has been the most difficult year for the industry, but by the end of the year it appears the industry has reached a bottom and from here there can only be some improvement."

Tea Board chairman NK Das had recently, while addressing members of Darjeeling Planters Association, said despite not so encouraging figures on export front, the trend in the tea industry had shown some signs of improvement.

"It is a fact that this year we have seen the prices of not only Darjeeling tea, but other varieties as well, going up. After three years, I can say we seem to be getting over what was happening in the market," Das said.

Tea experts were confident that with there being no major carry over stock, the industry was expected to open the new year on a better note.

Commenting on the export scenario, Dhanuka, also managing director of Dhanseri Tea and Industries Limited, said the country's exports had come down mainly due to Iraq effect. "In 2002, India had exported about 40 million kgs of tea to Iraq, but in 2003 there was practically nil export to that country."

He said the loss to Iraq was compensated to a great extent by the increase in domestic consumption. "Export to Pakistan had also increased by over 100 per cent during the year (2003) and is likely to increase further."

Jhawar said Pakistan is a good buyer and very recently had started importing tea from India. "It is opening up and with the improvement in political front, export scenario to Pakistan is looking better."