Tea prices spiral as rain plays truant in June, July

Prices are Rs 35 a kg more than last year.

Close on the heels of poor rain in June, deficient rainfall in July has pushed up tea prices further.

Industry sources said tea prices were hovering around Rs 35 a kg at present, higher than that during the corresponding period last year. The year began with a price increase of Rs 20-25 a kg, which eased a little during June after the monsoon set in.

However, deficient rain in July has resulted in sugar prices climbing again.
 

TEA PRODUCTION
District/ state	Jan-June 2008	Jan-June 2009	Change over 2008
Assam Valley	132,397	132,644	247
Cachar	17,827	16,455	-1,372
Total Assam	150,224	149,099	-1,125
Darjeeling	4,125	3,690	-435
Dooars	44,564	44,466	-98
Terai	25,154	23,134	-2,020
Total West Bengal	73,843	71,290	-2,553
Others	1,896	2,037	141
Total North India	225,963	222,426	-3,537
Tamil Nadu	81,864	76,938	-4,926
Kerala	34,880	31,806	-3,074
Karnataka	2,973	2,725	-248
Total South India	119,717	111,469	-8,248
All India	345,680	333,895	-11,785
Figures in thousand kg

 

Good quality Assam tea was selling at Rs 160 a kg compared with Rs 125 in the same period last year, while good Dooars was at Rs 130 as against Rs 110. South Indian tea, at Rs 90-110, is up Rs 20-30 a kg.

If the current trend of deficient rainfall continues, the year will end with a record shortfall of tea, more than what was anticipated at the beginning of the year.

Industry sources said the shortfall in the main black tea producing countries such as Kenya, India and Sri Lanka would stand at 130-140 million kg, what was pegged at 80-100 million kg at the beginning of the season. Till June, the shortfall in the world production was at 62 million kg, without factoring in the pipeline deficit.

In India, the shortfall at the end of the season was likely to be around 70 million kg. Industry sources said this could lead to an early closure. The season normally ends in December.

The Indian tea season started with a deficit of 25 million kg.

The yearly increase in consumption is 30-35 million kg.

Tea Board of India Chairman Basudeb Banerjee said, “We would wait till mid-August before taking a call on the revision of projections.”

According to figures released by the Indian Tea Association (ITA), during January-June, the country’s production was 33.89 million kg, down 11.75 million kg.

However, Aditya Khaitan, chairman, ITA, said that a further crop loss was expected in the second half of July.

In June, the industry saw a rise in production at 118 million kg compared with 105 million kg last year.

The United Planters’ Association of Southern India (UPASI) officials said, initial estimates indicated that July could see a crop loss of 2.5 million kg. Though estimates were not available for North India, Assam witnessed less rains last month.