Having weathered a moderate performance, tea prices may be heading for a record high this year, going by the muhurat sales.
A small quantity of the first flush tea — tea plucked first during each growing season — has been sold through the private-sale mode. While good Assam tea has fetched Rs 200-300 a kg compared to Rs 200 a kg last year, Dooars and Cachar tea were sold for Rs 300-400 a kg as against Rs 300 a kg last year.
“Indications are that when auctions open in the next three weeks, prices will be higher by Rs 15-20 a kg. Last year, the trend showed that better tea registered higher prices, while medium tea was at the same level as that in the previous year. This year, even medium tea will record higher prices,” said Azam Monem, former chairman of Calcutta Tea Traders’ Association.
The weather pattern this year has been much better than the last, with good rainfall during the winter. The cropping pattern in Assam, which produces roughly half of India’s total tea output, is much better than last year. Especially, upper Assam, which has received good rain.
“We are looking at good opening for the season,” Aditya Khaitan, managing director of McLeod Russel India, the world’s largest bulk tea producer, said.
Moreover, the season will formally open with a shortfall. “The cumulative shortfall last year was 50-60 million kg,” Monem said.
What could go in India’s favour is that both Kenya and Sri Lanka, the other major producers, have clocked in lower crop on the back of divergent trends in the weather. While, Kenya is facing a severe drought, Sri Lanka has seen unprecedented rainfall since December.
“The situation in Kenya is so bad that more than a dozen tea factories are on the verge of being shut down as green leaf tea production is lower by 80 per cent,” an industry representative said.
Production in Sri Lanka was about six million kgs lower cumulatively till February due to heavy rainfall, which slowed the growth of tea bushes. India, Sri Lanka and Kenya produce around 86 per cent of the total tea and a shortfall in the three countries may imply that the cup of morning tea will cost more.
