 "Muted start for new tea season")
The new tea season has started on a muted note, with most varieties clocking prices lower than last year, something not seen in recent years. Sluggish arrivals, inadequate rains in upper and lower Assam and unsold stock from last year are the primary reasons behind the fall in prices.
“Old teas are being sold at Rs 80-100 a kg,” said Azam Monem, vice-chairman of the Indian Tea Association. He added though last year had also seen a drought, there was no carryover stock and prices were strong on higher demand and lower production.
This year, prices of some Assam teas are about Rs 200 a kg, compared with Rs 220 last year. For the past few years, the season has opened on a strong note, with some Assam varieties being sold at Rs 280 a kg and, in some cases, even Rs 300.
Not only are new-season teas priced lower than last year, there is also wide disparity between new and old teas available in the market.
The industry is optimistic prices will pick up. “There is demand building up due to shortage of rainfall,” Monem said.
In 2014, production was 1,185 million kg, compared with 1,200 million kg in 2013. Though north India had clocked 943.6 million kg, against 958.6 million kg in 2013, production in Assam was lower by 32 million kg. The difference in production had narrowed towards the end of the year, leading to a carryover.
The situation in Darjeeling is dismal. In real terms, contracts with European companies have been signed at prices lower than last year. The cost of production has, however, increased about 90 per cent, with wages accounting for most of the rise. And, the rupee has appreciated significantly compared to last year.
“Foreign buyers are willing to give only 10 per cent more than last year. It’s a question of survival,” said Goodricke Group Managing Director and chief executive A N Singh.
Though there isn’t much time to explore new markets for the first flush variety, the Darjeeling estates might consider the markets in Iran, Russia and Japan for export.
In south India, teas are being sold at Rs 60-80 a kg. For 2014, the average auction price was Rs 82 a kg. Last year, production in the south stood at 241 million kg, compared with 241.8 million kg in 2013.
PRICE DIP
Production of tea (Up to Dec in million kg)
“Old teas are being sold at Rs 80-100 a kg,” said Azam Monem, vice-chairman of the Indian Tea Association. He added though last year had also seen a drought, there was no carryover stock and prices were strong on higher demand and lower production.
This year, prices of some Assam teas are about Rs 200 a kg, compared with Rs 220 last year. For the past few years, the season has opened on a strong note, with some Assam varieties being sold at Rs 280 a kg and, in some cases, even Rs 300.
Not only are new-season teas priced lower than last year, there is also wide disparity between new and old teas available in the market.
The industry is optimistic prices will pick up. “There is demand building up due to shortage of rainfall,” Monem said.
In 2014, production was 1,185 million kg, compared with 1,200 million kg in 2013. Though north India had clocked 943.6 million kg, against 958.6 million kg in 2013, production in Assam was lower by 32 million kg. The difference in production had narrowed towards the end of the year, leading to a carryover.
The situation in Darjeeling is dismal. In real terms, contracts with European companies have been signed at prices lower than last year. The cost of production has, however, increased about 90 per cent, with wages accounting for most of the rise. And, the rupee has appreciated significantly compared to last year.
“Foreign buyers are willing to give only 10 per cent more than last year. It’s a question of survival,” said Goodricke Group Managing Director and chief executive A N Singh.
Though there isn’t much time to explore new markets for the first flush variety, the Darjeeling estates might consider the markets in Iran, Russia and Japan for export.
In south India, teas are being sold at Rs 60-80 a kg. For 2014, the average auction price was Rs 82 a kg. Last year, production in the south stood at 241 million kg, compared with 241.8 million kg in 2013.
PRICE DIP
Production of tea (Up to Dec in million kg)