Untimely rains likely to advance tea season

Higher demand to keep prices up by Rs 8-10 a kg despite inventory.

Untimely rains may set the stage for an early tea season this year, implying that stocks will remain intact. Industry representatives said the season was likely to start from mid-March, instead of late-March.

The industry feels that even if stocks last till the year-end, the new season will start on a good note and prices will be higher by around Rs 8-10 a kg.

Sources said, "With rising consumption and the thrust on exports, the price increase should be maintained. If production is high this year, it is unlikely that it will be the same next year too."
 

INDIAN TEA AUCTION
	January to December
	2005		2006
	In mn kg	Rs/kg	In mn kg	Rs/kg
Kolkata	140.70	71.14	134.20	79.61
Siliguri	90.40	58.38	87.10	64.90
Guwahati	142.90	60.57	120.30	67.79
Jalpaiguri	0.70	52.46	0.30	62.74
North India	374.60	63.62	341.80	71.69
Kochi	60.30	49.40	59.10	54.41
Coonoor	41.60	36.03	37.40	47.77
Coimbatore	19.80	40.91	23.30	49.38
Tea Serve	13.70	35.73	14.80	46.21
South India	135.40	42.67	134.60	50.79
All India	510.10	58.06	476.40	65.79
Source: Tea Board

Tea production for 2006 was up by 28 million kg to Rs 955.9 million kg, while imports also increased by more than 7 million kg.

Despite the increased production, the average Indian tea auction price was up by Rs 7.73 a kg to Rs 65.79 a kg, while Kolkata auction prices were higher by Rs 9.47 a kg.

In fact, two-three Kolkata auctions were scrapped owing to depleted stocks. Overall auction sales were down by 34 million kg.

This, according to industry sources, was on account of the 4.8 million kg increase in exports to 203.8 million kg. Volatility in auction prices further boosted private sales and strategic alliances. The rise in prices over the past year for private sales ranged between Rs 8 and Rs 10 a kg.

Sources said the fact that prices were higher despite increased production and higher imports indicated that consumption was growing.

The Indian Tea Association status paper has pegged domestic consumption for the year at 805 million kg, 25 million kg higher than the previous year's level of 780 million kg.