The Hindu Business Line : `Tea prices slated to rise higher'

MR Anil Kumar Prabhu, Member of the Cochin Tea Traders Association and Tea Buyers Association, is bullish about the short-term prospects in tea prices.

He also says that rains in March in Kenya hold the key to further rise. Mr Prabhu expresses his views on the emerging trend.

How has the South Indian tea prices been acting in the recent past?

South Indian tea prices have surged in the last two weeks. This has been especially so in the case of CTC varieties, which have grown by Rs 10-15. And the prime reason for the spurt seems to be the adverse climatic conditions prevailing in Kenya and the fall in the production.

Do you expect the tea prices to maintain its growth?

Quite possibly in the immediate future. Kenya is expected to receive its next rains in March. If that also fails or if there is a shortage, then possibility of the price spurt sustaining for a longer period becomes a distinct possibility.

Where do you see the increased buying coming from?

The increased buying has been coming from exporters. And most of the new buyers seem to be targeting the Kenyan and Pakistan markets. Kenya has begun importing from India to fulfil its export commitments. And South India has emerged as the most competitive destination for buying CTC varieties. Pakistan, which used to source bulk of its tea exports from Kenya, has also emerged as a major buyer.

Do you think the South Indian tea growers will be able to take full advantage of the situation?

They have already begun to enjoy better prices in the last two auctions. And the firm trends are likely to be sustained into the coming months. But the growers may not be able to tap the potential fully since the major plucking season is over and the summer is beginning to set in.

Production in North India is also likely to be constrained since it has been a harsh winter, the grip of which is yet to fully recede. So the question of greater production fetching higher prices seems dim at the moment.