World tea prices are seen buoyant this year because of sharp falls in production caused by drought in the biggest exporting countries, Kenya and Sri Lanka, industry officials said.
"The prices of tea are going up in (the) world market as production of the crop has been falling in major producing countries," said Hakim Khan, a tea auctioneer in Bangladesh. The upward trend might continue if big tea producers were unable to make up the production losses over the rest of the season, he said.
Kenya, which produced a record 257 million kg of black tea in 1996, edging out Sri Lanka as the world's biggest exporter, suffered a 41 per cent crop shortfall in January-April this year, leading trader Africa Tea Brokers (ATB) said.
Kenya's output fell to 54.97 million kg in January-April or 38.47 million kg below the same period in 1996, with output in April alone falling by more than half, they said.
Sri Lanka, which produced a record harvest of 258.4 million kg in 1996, had a 7.2 million kg deficit up to April this year producing 76 million kg against 83.3 million kg in the same period of 1996, brokers John Keells said in a report.
"The crop improvement in Kenya since the onset of the rains has been relatively slow, and as the start of the Indian season was also relatively poor, the international supply position in the current year is not matching up to demand," the report said. "Consequently, the world tea market continues to be buoyant," it added.
Indian tea traders said firm crop estimates were not yet available but output in 1997 was expected to be around 760 million kg, against the record 780 million achieved in 1996.
India produced about 54 million kg of tea between January and March 1997, down by 4.7 million kg in the same period in 1996, they said.
Bangladesh expects lower tea output in calendar 1997 compared with 55.13 million kg in the previous year, tea market sources said. January-April production dropped by 0.4 million kg to 5.3 million kg from the same period in 1996 in the country, they said.
