The Hindu Business Line : Tea output drops sharply in March; exports recover

Chennai, May 17 The country's tea production and exports declined during the first quarter of the current annual year but that resulted in only a marginal rise in the average realisation at auctions across the country.

According to Tea Board statistics, tea production during January-March dropped 11.3 million kg (mkg) to 86.7 mkg compared with the same period a year ago.

Adverse weather

Of this, the decline was rather sharp in March when production slipped by 7.4 mkg to 50.7 mkg. According to industry sources, adverse weather conditions, mainly prolonged dry period in North and South India, led to the decline in production.

For the January-March period, North India production declined 7.4 mkg to 44.3 mkg, while in South it slipped 3.9 mkg to 42.4 mkg. In March, tea output dropped 5 mkg in North to 35.1 mkg, while in South it was down 2.4 mkg to 15.6 mkg.

Exports, on the other hand, made headway in March, increasing by 5 mkg to 19.2 mkg compared with the same period a year ago. However, overall exports since the beginning of the year was down 0.9 mkg to 44.1 mkg.

Export prospects

Industry sources said one worrying factor on the exports front was the appreciation of the rupee against the dollar. The rupee has gained 8-9 per cent since the beginning of the year against the dollar.

According to Mr Ulhas Menon, Secretary-General of the United Planters' Association of Southern India, prospects for exports are good as India was opening a centre in Egypt, while Pakistan has expressed the view that it would not like to depend on one single source for its tea requirements.

Most of Pakistan's 140 mkg tea imports are from Kenya with Sri Lanka and other origins chipping in a bit. Last year, India made significant progress in the neighbouring market garnering 15 mkg. "But Pakistan is looking for fillers at Rs 40-45 a kg from India. It is unlikely that they will get tea at those prices," Mr Menon said.

Lanka output dips

Last year, tea exports were 203 mkg and this year, a target of 210 mkg has been set. One factor that could roll out in India's favour, particularly South India, is that production in Sri Lanka declined during the first quarter. During January-March, its output dropped 13.8 mkg to 63.7 mkg. Exports from the island nation, too, were lower by 4.1 mkg at 70.9 mkg, compared with a year-ago period.

During March, the quantity of tea sold at the auctions slid 2.7 mkg to 12.8 mkg, while for the first quarter it was 3.1 mkg at 86.8 mkg. The highest quantity of tea during the first quarter was sold by Kenya with 93.8 mkg being sold against 62.9 mkg last year. The increase in sales is attributed to lower crop in Kenya last year.

On the price front, the realisations improved by Rs 3.36 to Rs 60.25 a kg during the first quarter, while in Lanka, the prices were up Rs 13.69 to 99.04 a kg.

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