Tea growers upbeat on price recovery

Tea prices at the current level are the best in the last five years, largely on the back of lower crop and higher exports.

Industry sources said, the crop was down by 30 million kg till April this year and this had bettered prices. Volumes of tea till sale 24 at the auctions were lower but, sale 25 onwards were at the same level as last year.

Prices of Assam tea at the Guwahati auctions were at Rs 72.24 per kg as against Rs 59.73 per kg and Cachar at Rs 59.29 per kg as compared to Rs 49.43 per kg. The all-India average was at Rs 70.83 per kg as compared to Rs 58.51 per kg.

Sources said that the current prices were the highest, if the last five years were taken into consideration.

Exports, which were as low as 173 million kg last year, were headed for a rebound, with markets like Iran and Iraq were opening up.Industry representatives said that exports were likely to touch 200 million kg, this year.

An Iraq ministerial delegation visiting the country had already announced that it would pick up 100 million kg from India. This could be boon for the south Indian tea as Iraq primarily consumed orthdox tea.

Sources said, Iran, which opened up, was also expected to pick up significant amount of tea and also Libya.

Pakistan was also expected to up its import from India from last year's 6.2 million kg.

A delegation from the Indian Tea Association (ITA) had already entered into a memoradum of understanding (MoU) with Pakistan Tea Association (PTA) for increasing the offtake from India to 25 million kg, over a period of time.

Domestic consumption was also looking up. Last year, domestic consumption at 693 million kg was higher by 12-15 million kg.

The industry believed that if the situation could be sustained till July, when production actually peaks, then the industry would finally be out of the woods.