The tea industry hopes to start the new season on a good note with a price rise of at least Rs 25-30 a kg.
A representative of the industry said, “We are hoping to close the season with average North India tea prices at Rs 85-90 a kg, and expect the new season to open at Rs 120-130 a kg.”
The new season teas are expected to arrive by the middle of March. Last year, the season closed at around Rs 75 for North Indian teas and opened at Rs 110 a kg. However, the expectations for the new season had factored in a normal shortfall of around 5 million kg, while this year the industry is expecting a shortfall of close to 30 million kg.
Aditya Khaitan, chairman, Indian Tea Association, said that the shortfall would be around 30 million kg but refused to reveal any price expectations for the coming season. He, however, said it would be a strong opening.
The first few Dooar teas have already started coming in. Industry representatives said they were higher from the previous year’s prices by Rs 15-20 a kg. But these teas are not an indication for the new season’s opening, they explained.
Rains in the northern part of the country were also less this year, which could impact crop output. Moreover, most of the tea producing countries such as Africa and Sri Lanka have seen a huge drop in production.
Khaitan said the drought-like conditions in these countries meant more export enquiries for India.
As opposed to last year’s export of 14 million kg, bilateral buying, which meant government buying, was expected to increase to 25 million kg.
“There was strong demand from Iran,” said a source. Further, while the global meltdown had impacted all other commodities adversely, the scenario for tea is just the opposite.
“Consumption of tea in countries such as Russia have increased. People have diverted from expensive beverages such as juice to tea, but not premium tea. We will have more than 200 million kg of exports this year,” an industry source claimed.
If exports exceed more than 200 million kg and the crop is less than the projections then the shortfall could widen further. The ITA projections for 2008 were production of 962 million kg, exports of 200 million kg, imports 20 million kg and consumption 825 million kg.
