Auction prices of tea shot up by 16 per cent in the first seven months of 2008 on the back of rise in exports, though the volume of tea available for auctioning witnessed a fall in northern India and increased in the south.
According to the Tea Board, prices of tea at auctions have increased to Rs 76.40 per kg till July, from Rs 65.80 per kg in the year-ago period.
Similarly, auction prices in northern India have posted a 20 per cent rise to Rs 86.55 in July, while prices in the southern part of the country have shot up by 14 per cent to Rs 59.23 against the same period last year.
However, tea volume at auctions in the northern region fell to 1.56 lakh kg till July from 1.64 lakh kg in the same period last year, while it rose to 92,426 kg in the southern part from 75,305 kg.
The rise in auction prices can be attributed to a 19 per cent surge in exports that put pressure on domestic prices, an industry expert said.
Moreover, shortfall in tea production in Kenya and better export prospects with Iraq have boosted India’s exports and, thereby, moved up auction prices, he added. Tea Board Chairman Basudev Banerjee had said India is expected to export around 20 million kg of tea to Iraq this year.
Kenya is also likely to witness a decline of around 40 million kg in its tea production this year, he added. Already, tea exports in the first seven months of the year have shot up to 105.56 million kg, compared with 88.86 million kg in the same period last year.
In value terms, the shipments between January and July rose to Rs 1,096 crore, against Rs 910.27 crore in the year-ago period.
India’s tea production, the second largest in the world, is likely to inch up to around 950-960 million kg this year as against 945 million kg last year. Already, tea output between January and July increased to 476.63 million kg against 459.79 million kg in the year-ago period.
India is the largest producer of black tea in the world though China remains the top tea producer with an estimated output of 1,094 million kg in 2007.
