The Hindu Business Line : Tea prices, exports decline; output up

DOMESTIC tea industry is once again showing signs of depression. For the period January to June, production is up, auction prices and exports are down. The saving grace is falling imports.

According to the statistics compiled by the Indian Tea Association (ITA), total tea production in India during this period was 312.7 million kg (mkg) against 280.5 mkg in the corresponding period of 2004, marking a growth of 11.5 per cent.

While in North India production went up to 214.1 mkg from 191.6 mkg, it increased to 98.6 mkg from 88.9 mkg in the South. Both these areas recorded growths of 10-11 per cent.

Among the major competitors of India, Kenya registered a fall of 1.9 per cent in its production. However, in Sri Lanka production grew by 4 per cent to 165.7 mkg from 159.3 mkg.

The average domestic auction price also suffered. It dropped to Rs 57.69 a kg from Rs 59.62. The total offtake through the auctions had, however, increased to 231.7 mkg from 213.8 mkg.

In the three North India auction centres, the prices dropped by more than Rs 3.5 a kg to Rs 64.51 from Rs 68.29. In South India, it remained more or less stagnant at the Rs 44-per-kg mark.

Globally, auction prices dropped at the Mombasa (Kenya) auction centre but improved at the Colombo (Sir Lanka) auction centre. However, these price improvements are marginal.

Tea exports from India dropped by over 11 per cent to 75.2 mkg from 84.6 mkg in the corresponding period of 2004. Foreign exchange earnings dropped to Rs 687.06 crore from Rs 721.21 crore in 2004 despite an improvement in the average export price. It increased to Rs 91.34 per kg from Rs 85.23 per kg.

Sri Lankan exports (January-March) suffered too. It dropped by 4.3 per cent to 70.4 mkg from 74.7 mkg.

Kenyan exports (January-April) improved slightly to 117.1 mkg from 112.4 mkg. Chinese tea exports in the first two months of 2005 increased by 16 per cent to end at 40.2 mkg from 34.7 mkg.

Tea imports into India dropped by 4.2 per cent. Against 12.49 mkg during January-June 2004, it fell to 8.29 mkg in 2005.

The average import price also dropped to Rs 53.50 from Rs 45.30 a kg.

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