Indian tea prices are expected to remain firm on the back of a strong domestic demand, unlike many of its other tea producing counterparts, where prices have crashed.
Industry representative said tea prices have come off its peak levels in September when the average North India tea price was Rs 101.83 per kg compared to Rs 67.48 per kg in the previous year. “It has come off from that level in the recent sales but will go up again irrespective of whether exports are on target or not,” said a senior tea representative.
Aditya Khaitan, chairman, Indian Tea Association (ITA) said, “Going forward, consumption would come from India. Also production could be lower than last year due to weather condition as it had already cooled down in Upper Assam, he pointed out.” Khaitan also said that financial market turmoil in export markets like Russia and Pakistan or the drop in oil prices would have no impact on Indian tea prices because of its strong domestic demand growing at the rate of three per cent year-on-year.
North Indian tea prices during April-June was Rs 95.21 per kg compared to Rs 75.27 per kg in the same period last year. In a globalised economy, while many of the sectors were moving in tandem with its peers in the rest of the world, the tea industry appears to have bucked the trend.
African tea prices fell by nearly 2.7 per cent at the weekly auctions at Mombasa and the Sri Lanka’s state-run promotion and regulatory body would have to buy large stocks of tea at the Colombo auctions to prevent prices from crashing.
Domestic tea producers said, prices in India had eased by a few rupees though but that was from peak levels and were likely to look up in the in the next few weeks again.
The easing could be attributed to poor quality tea, which was typical of this time of the year. Moreover, exports were also on target. Basudeb Banerjee, chairman, Tea Board of India said, as of now exports were on target and would stand at 210 million kg at the end of the year.
“The global market crisis would not have any immediate impact,” said Banerjee.
