Export boost for a troubled sector

IN FOCUS/ TEA

After six straight years of recession, the fortunes of the tea industry appear to be headed for a U-turn.

With the new season now well-entrenched, the a clearer picture and stronger picture has emerged.

The export story looks certainly stronger than last year and the decline in crop yield is also working in favour of the industry.

Kiran Desai, chairman Calcutta Tea Traders Association (CTTA) said that prices were going up steadily and they were higher than last year. Prices were expected to pick up further in the coming months.

As a result, sentiment in the industry was upbeat and the reasons behind this were more than one.

Desai said, the implementation the new Tea Marketing Control Order (TMCO) ensures that there was no carryforward and coupled with this arrivals dropped by more than 40 per cent at all auctions centres.

Till March crop was down by around six million kg and industry sources indicated that the drop in crop in April would be higher.

Weather conditions was the primary reason. While north Bengal was affected by no rain, Assam was now facing torrential rains. The extreme climatic conditions were not in favour of the industry.

However, prices certainly were in favour. Sources said, quality tea, which was virtually absent last year had started coming through and hence the prices fetched were significantly higher.

Another reason, which was emerging as a stronger reason was the export story.

Exports, which were at 173 million kg last year as compared to 200 million kg in the previous year was likely to spring some surprises, this year.

The Iraq ministerial delegation visiting the country had already announced that it would pick up 100 million kg from India. This could be boon for the south Indian tea as Iraq primarily consumed orthodox tea.

Sources said, Iran, which opened up, was also expected to pick up significant amount of tea and also Libya.

Pakistan was also expected to up its import from India from last year's 6.2 million kg.

A producers delegation lead by Indian Tea Association (ITA) chairman, C K Dhanuka was at present in Pakistan to enhance the relationship.

Industry sources said, exports till March were at 37 million kg as compared to 30 million kg and it was still going strong.

Back home, consumption looked good. Last year domestic consumption at 693 million kg was higher by 12-15 million kg.

With the all the factors working in favour of the industry, the representatives believed that it was finally headed for a rebound.