Short crop aids prices

IN FOCUS/ TEA

Tea prices continue to move up, largely on the back of lower crop, higher exports and virtually no carryforward.

Tea Board figures show that during January-May crop was down by 34.5 million kg.

During the month, north Indian tea production was lower by four million kg, while all-India crop was lower by 4.3 million kg.

Exports during January-April were at 46 million kg as compared to 38 million kg, last year.

Not surprisingly, tea prices were up by around Rs 15 from last year. North Indian prices were at Rs 57.84 per kg and all-India at Rs 75.72 per kg.

North India accounted for most of the dip in prices due to poor growing conditions.

Though the current picture looked rosy, the real test would be mid-July, when production peaked.

Industry representative s pointed out that July-October were the most productive months and if, prices were firm till then, it would be a good year for the industry, after a long while.

But, there was widespread optimism in the industry that prices would be above last year's level. The industry believed that even during the July-October, the shorfall in crop would not be met and the year was likely to end with lower crop by around 30 million kg.

Currently prevailing prices were higher than last year's by Rs 15 per kg and even though the difference over the next few months could narrow down, overall prices were expected to be at a level higher than the previous year.

Export offtake was also likely to take off with a fervour once the new crop sets in. Industry sources said, most of the exports were old crop.

Pakistan had already entered into a memorandum of understanding with Indian Tea Association (ITA) that exports would gradually increase over the next few years.

Moreover, the Iran market was expected to pick up with the ban being lifted. Iraq had also expressed interest in Indian tea and government officials visiting the country said that it would lift around 100 million kg from India.