Special Correspondent

Global shortage put at 45 million kg on poor climatic conditions

Total crop is lower by 15 per cent

Average price stands at Rs. 97.20 a kg

KOLKATA: India, along with most other tea-producing countries, has suffered a drop in production as well as exports of tea in the first quarter of 2009. Indian exporters are optimistic that the global shortage will create opportunities for India.

Indian exports have dropped by 12 million kg between January and March 2009 touching 38.9 million kg against 50.9 million kg in the same period in 2008. Export earnings, however, have been higher at Rs 488.20 crore on improved prices. The average export price has been around Rs. 125.5 a kg with improvement being reported by exporters in South India as well as North India, according to available statistics. The average price stood at Rs. 97.20 a kg in the first quarter of 2009-10 and at Rs. 114 in 2008 calendar year.

Industry sources said that a global crop shortage of 44.5 million kg had emerged in the first three months of 2009 mainly on account of poor climatic conditions and absence of rainfall. Major tea-producing countries which have reported a shortfall are: India (8 million kg), Kenya (5 million kg) and Sri Lanka (33.9 million kg). The total crop has been estimated at 254.6 million kg which is 15 per cent lower than that of the first quarter of 2008.

This translates into good news for the industry as tea prices have maintained their upward spiral.

At domestic auction centres, prices averaged Rs. 81.90 a kg against Rs. 64.90 a kg in the same period in 2008. Around 50 per cent of Indian tea is sold through the auction route, with the remaining being sold through private sales.

At overseas auction centres, the steepest rise was seen in Chittagong in Bangladesh, with Colombo auction centre showing a drop in prices. Prices averaged Rs. 129.80 a kg against Rs. 121.20 a kg. Total exports of tea stood at 184.3 million kg which was 20.7 million kg lower than in 2008.

Although the data were incomplete for some countries, March figures were not available sources at the industry apex body, the Indian Tea Association, said. Between January and February, however, even China showed lower exports. The exporting community is, however, not unduly worried about the lower exports which have come mainly due to lesser exports to India’s single biggest market Russia as also Iran. They feel that the world crop shortage, especially in Kenya and Sri Lanka — two of India’s rivals in the international black tea exports area — may bring good news.

It is being felt that since India produces both orthodox and CTC tea, it can capture some of the markets created by shortages in Sri Lanka which is an orthodox tea-producer and some of the markets dominated by Kenya, a CTC tea maker.