The Hindu Business Line : Tea, plantation stocks jump on firm price trends

Mumbai, May 21 Buoyed by the rise in prices at the auction centres, tea and plantation stocks hogged the limelight on Wednesday in the Bombay Stock Exchange. Harrisons Malayalam jumped 20 per cent to Rs 122, Jay Shree Tea 16 per cent at Rs 162, CCL Products 16 per cent at Rs 197, McLeod Russel India 12 per cent at Rs 115, Warren Tea 8 per cent at Rs 92 and Tata Tea gained 3 per cent at Rs 949.

Sentiment was further boosted by the unconfirmed news that Kolkata-headquartered Tata Tea is in talks with Turkish tea-maker Dogus Cay. Though Tata Tea refused to comment on the possible deal, the Dogus Cay Chairman, Mr Suleyman Karakan, was more forthcoming in the Turky newspaper Hurriyet.

Talks are being held with Tata Tea for a possible partnership. But Dogus Cay’s majority stakeholders were not willing to part with a controlling stake in favour of Tata Tea, said Mr Karakan in Hurriyet.

The hot beverages segment in Turkey has shown excellent sales growth, while volume-growth was the highest in Turkey’s retail and foodservice business in the last two years.

Good demand

Prices at the tea auction centres across the country rose to Rs 80 a kg from Rs 70 a kg, due to good demand from both domestic and international markets amidst reduced supply. Apart from low carry-forward stock and lesser production estimate in Assam, the largest tea growing State, the drought-like situation in North Bengal has seen average tea prices in Kolkata auction crossing the Rs 100-per-kg mark.

Supply constraints have also improved prices at the Coonoor and in the Northern centres such as Siliguri and Guwahati.

Domestic consumption this year is likely to be about 800 million kg against 780 million kg last year, according to the Tea Board.

Export opportunity

“Prices are likely to remain firm in view of short supply and good demand in the current year,” said an analyst.

In March, tea exports have increased by 20.42 per cent to 16.04 million kg from 13.32 million kg in March 2007. Increased shipments to Pakistan and the West Asia have helped exports rise during the current year.

The political crisis in Kenya has opened new export avenues for India.

India will pursue larger quantities of tea to UK, Pakistan, Egypt and the West Asian nations this year.

The Kenyan shortfall may open up a huge export opportunity, but India may not be the largest beneficiary, as Sri Lanka with better quality tea may capture a large part of the opportunity, he said.

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