Lower volumes fail to cheer tea

Price realisations over the past year have not not really cheered up the tea industry.

Addressing the annual general meeting of the Terai branch, Indian Tea Association (ITA), C K Dhanuka, chairman of ITA, said while the situation had started looking up in the first half of 2004 in the form of marginal improvements in price realisations, the industry has since had to temper its optimism in the backdrop of a sharp decline in production in 2004 leading to lower turnovers despite the marginal price improvements.

"It must be placed in perspective that the rise in price realisations in 2004 have been only to the extent of taking us to the price levels in 2000" he said.

The industry was yet to touch the levels of 1998, when prices peaked.

The export front also held out disappointments.

Dhanuka said, the initial optimism in the industry in 2004 had been largely shaped by improvements on the export front, as shipments rose in the first half of the year.

This was led by resurgence in Iraq after exports had plummeted because of the conflict in 2003.

However, despite the pickup in Iraq and Kenya, Indian exports to Russia and the CIS continued to be a matter of concern.

"We expect Russia and CIS to buy only 50 million kg in 2004 against 58 million kg in 2003. This market is, as all of us are aware, largely merchant exporter led and the consistent feedback that we have been getting is that inadequate availability of orthodox tea is constraining exports in the market" said Dhanuka.