Global tea shortage has risen to unprecedented levels. The deficit is being pegged at 80-100 million kg for the three major producing countries — India, Sri Lanka and Kenya.
These three countries account for 80 per cent of the total black tea production. The last major shortfall took place in 1999, which also recorded peak prices, but that was restricted to India.
Taking the pipeline deficit and crop loss into account, the scenario could be worse for India.
The country has started the season with a pipeline deficit of nearly 25 million kg and taking into account the shortage of further 20 million kg this year, it would be nearly 5 per cent of India’s crop. This is alarming for India, which is a net exporter of tea.
Industry sources said, this was the first time that the shortage was across all tea producing countries.
According to estimates for 2008 for India, production is pegged at 960 million kg, exports at 200 million kg, imports at 20 million kg and consumption at 825 million kg.
Azam Monem, former chairman, Calcutta Tea Traders Association (CTTA), the only licensed and official organiser of public tea auctions in Kolkata, said, the shortfall in April in north India alone was to the tune of 15-20 million kg, which was around 40-50 per cent lower than normal production in the same period.
Taking the pipeline deficit of 25 million kg into account, the deficit in north India comes to around 45 million kg. In south India, the shortfall in March was to the tune of 14 million kg.
Ullas Menon, secretary general, United Planters’ Association of Southern India (UPASI), said, the shortfall was around 14 million kg up to March, down 35 per cent and this would be carried forward into April.
India alone is staring at a initial shortfall of around 60 million kg. Industry representatives said, for north India, the crop loss in March and April was unlikely to be covered in the following months.
Monem said, “This cannot be covered in May-July. The only period when it can be covered is October-December.”
Not surprisingly, prices were up in the market. Prices for Dooars teas were higher by Rs 25-30 to Rs 125-140 per kg, while Assam tea was selling higher by Rs 20 to Rs 120-145 per kg. South Indian tea prices were higher by Rs 8-9 per kg.
The shortage on account of global warming is also acute in Sri Lanka. In the first two months of the season, production has dropped to a 10-year low at around 25 million kg.
For Kenya, the drop is around 5.6 million kg, but the country is carrying a deficit of 30 million kg into the year, on account of last year’s drought.
Monem said, the second flush of prices in May would be very strong on account of the shortage.
