Tea ouput seen rising 6%

The Indian tea industry is rather upbeat with positive signals coming in from almost all fronts "� production, consumption and price.

P T Siganporia, chairman of Indian Tea Association (ITA) and MD of Tata Tea, said, "According to a quick estimate, Indian tea production will be touching 920 million kg in 2005, 5.74 per cent higher than last year's figure of 870 million kg. Moreover, per capita consumption is expected to touch an all-time high of 733 gm."

Although the average auction price of tea has declined over the years, the industry is expecting the prices to firm up.

"Lower stocks at auction centres may lead to a trigger in the commodity's prices. The industry is optimistic about the price expectations for 2006." he added.

Aditya Khaitan, vice-chairman of ITA and managing director of Mcleod Russel India, said, "Previously, around 50 per cent of our supply to the auction centres was carried forward to next year, thereby creating additional tea supply. This year, around 90 per cent of supply quantity to auction centres has been sold out." This, therefore, is paving the way for the prices to firm up, he explained.

Siganporia further said, "Current year's cumulative stock position reflects a similar position seen in 1999, when there was a significant increase in the commodity's price. It indicates buoyancy in the market."

This would not affect the end-point price as there has been enough margin between the existing auction price and the end-point price.

Industry sources hinted that given the increasing demand and market mood, the market might witness supply shortage. Estimates released by ITA revealed that exports might be lower by 9 per cent than last year's 198 million kg.

"Though current figure reflects that Indian tea export is lagging behind the previous year's performance, we are expecting to the segment to perform at par with the previous year's show," Siganporia added. The global tea production is likely to touch 3,303 million kg in 2005, higher by 70 million kg.

India's share in the world tea production is likely to be 27.8 per cent in 2005, up from last year's 26.9 per cent contribution.