CorporateTea prices spiral as rain plays truant in June, July
Prices are Rs 35 a kg more than last year.
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Close on the heels of poor rain in June, deficient rainfall in July has pushed up tea prices further.
Industry sources said tea prices were hovering around Rs 35 a kg at present, higher than that during the corresponding period last year. The year began with a price increase of Rs 20-25 a kg, which eased a little during June after the monsoon set in.
However, deficient rain in July has resulted in sugar prices climbing again.
TEA PRODUCTION
District/ state
Jan-June
2008
Jan-June
2009
Change
over 2008
Assam Valley
132,397
132,644
247
Cachar
17,827
16,455
-1,372
Total Assam
150,224
149,099
-1,125
Darjeeling
4,125
3,690
-435
Dooars
44,564
44,466
-98
Terai
25,154
23,134
-2,020
Total West Bengal
73,843
71,290
-2,553
Others
1,896
2,037
141
Total North India
225,963
222,426
-3,537
Tamil Nadu
81,864
76,938
-4,926
Kerala
34,880
31,806
-3,074
Karnataka
2,973
2,725
-248
Total South India
119,717
111,469
-8,248
All India
345,680
333,895
-11,785
Figures in thousand kg
Good quality Assam tea was selling at Rs 160 a kg compared with Rs 125 in the same period last year, while good Dooars was at Rs 130 as against Rs 110. South Indian tea, at Rs 90-110, is up Rs 20-30 a kg.
If the current trend of deficient rainfall continues, the year will end with a record shortfall of tea, more than what was anticipated at the beginning of the year.
Industry sources said the shortfall in the main black tea producing countries such as Kenya, India and Sri Lanka would stand at 130-140 million kg, what was pegged at 80-100 million kg at the beginning of the season. Till June, the shortfall in the world production was at 62 million kg, without factoring in the pipeline deficit.
In India, the shortfall at the end of the season was likely to be around 70 million kg. Industry sources said this could lead to an early closure. The season normally ends in December.
The Indian tea season started with a deficit of 25 million kg.
The yearly increase in consumption is 30-35 million kg.
Tea Board of India Chairman Basudeb Banerjee said, “We would wait till mid-August before taking a call on the revision of projections.”
According to figures released by the Indian Tea Association (ITA), during January-June, the country’s production was 33.89 million kg, down 11.75 million kg.
However, Aditya Khaitan, chairman, ITA, said that a further crop loss was expected in the second half of July.
In June, the industry saw a rise in production at 118 million kg compared with 105 million kg last year.
The United Planters’ Association of Southern India (UPASI) officials said, initial estimates indicated that July could see a crop loss of 2.5 million kg. Though estimates were not available for North India, Assam witnessed less rains last month.