South tea output up 11%

However exports drop by 12 million kg to 55.2 million kg during Jan-Aug

The decline in the level of tea exports from the southern region and an increase in the production this year have led to a weak price trend at the auction centres.

South India's tea production has gone up from 89 million kg in January- June 2004 to 99 million kg for the corresponding period this year, registering an increase of 11.2 per cent.

On the export front, South Indian tea exports dropped by 12 million kg to 55.2 million kg during January-August 2005 from 67.2 million kg for the corresponding period last year.

Commenting on the decline in exports, R D Nazeem, executive director (South India), Tea Board, Coonoor, told Business Standard, "There has been a decrease in the export level of tea because our main competitor countries like Indonesia and Vietnam have started producing tea at much cheaper rates. Whereas, here the cost of production is higher. Moreover, the domestic consumption of tea does not match with the increasing production."

The auction prices of tea at Coimbatore and Coonoor centres have been affected by this decline in exports. There was a drop in the offerings at Coimbatore auction centre during 2004-05 as against the previous year.

During January- August 2005, the Coimbatore auction centre offered 12,087 kg for Rs 42.06 per kg as against the 12,342 kg for 43.91 per kg for the same period last year.

Meanwhile, the Coonoor auction centre for the period of January-August 2005,witnessed an increase in its offerings from 28,310 last year to 28,577 kg this year. But there was a dip in the price of tea in this period from Rs 40.48 per kg to Rs 37.12 per kg.

Sources at these auction centres are of the opinion that if the increase in production is not accompanied by rise in exports, then auction prices would fall further.