The Hindu Business Line : Tea exports increase; production declines in line with global trend

TEA exports from India are up. Domestic tea production is down in line with the global trend and the average price at auction houses is increasing. Nothing can be better for the tea industry. However, exports in August 2004 suffered a minor setback to the extent of 2 million kg compared to the corresponding month in 2003.

Industry sources said that was an exception and should not be taken as a trend-setter. The overall mood in the tea industry is upbeat and everyone is expecting that the favourable trend will continue for the rest of the year.

According to the statistics available from the Indian Tea Association (ITA), during the period from January to July, overall domestic production dropped by 7.9 per cent to 493.1 million kg from 535.4 million kg.

In North India, output dropped by 8.2 per cent as it went down to 373 million kg from 406.2 million kg. In South India, it dropped by 7 per cent to 120.1 million kg against 129.2 million kg in the corresponding period in 2003.

At a global level, world tea output during the first eight months dropped by one per cent. It declined to 1011.1 million kg from 1021.2 million kg. Total global tea production in 2003 was 1639.5 million kg.

"Indian tea industry's competitiveness increases, when there is a fall in the global tea production because in such a scenario, the global tea prices increase. This price rise helps Indian tea, which is generally over-priced in the global market, to compete in the international market," sources said.

The average global auction prices are also rising. Except for the Chittagong auction centre in Bangladesh, where prices fell by 5 per cent, at all other centres such as Jakarta, Mombasa and Limbe, prices have increased. In Colombo, prices increased by 23.41 per cent.

Tea exports from India during the January-August period increased to 107.7 million kg against 92.4 million kg in the previous year. However, the average price realization has dropped to Rs 83.20 per kg from Rs 100.51 per kg in 2003.

During this period, Indian tea exporters have registered growth in their business with countries such as the UK, Poland, the United Arab Emirates, Iraq, Kenya, Japan and Pakistan.

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Tea exports increase; production declines in line with global trend