An end season supply shortfall in 2012 coupled with stagnant production outlook for the early season crop in 2013, set tea prices soaring.

According to J. Kalyansundaram, Secretary, Calcutta Tea Traders Association, there has been little or no carry-over stock from 2012. “The demand has been very good and there has been no carry-over stock from last year. This has pushed up the average prices of tea by over Rs 50 a kg, this year,” Kalyansundaram told Business Line. According to planters, lower rainfall is set to keep the production of the early season (first flush) crop in Assam stagnant at last year’s level. The north-eastern state contributes half of the country’s tea crop. “The next 2-3 days will be very crucial to determine production. If it does not rain during these days, then production could be affected,” said Arun N. Singh, Chairman of Indian Tea Association.

Poor rain might cast its spell on the second flush crop as well, Singh, Managing Director of Goodricke Group, said. First flush, which usually comes in end-March, accounts for nearly eight per cent of the country’s total production.

“In 2012, the crop was hampered due to the severe drought. This year, though the first flush is likely to be slightly better, it will still be lower compared to earlier years as some districts such as Jorhat have hardly received any rains,” said C.S. Bedi, Managing Director, Rossell Tea.

The first flush tea requires around two inches of rain each month during the January-March period for a good crop, sources said. However, the region hardly received any rains in January and February. Even in March, rainfall has been scanty and sporadic in some districts. Typically, nearly 50 per cent of the first flush comes up during the last week of March. “This year, we have the Holi coming up during the last week; this will delay plucking, thereby, bringing down the March production,” Bedi said.

Prices

Average prices of CTC leaf were up by nearly 55 per cent, at Rs 137 a kg in Sale 12 held on March 19 compared with Rs 88.48 in Sale 13 in 2012 (there was no Sale 12 last year). There would be no Sale 13 this year due to non-availability of tea this being the closure of the season.

shobha.roy@thehindu.co.in

(This article was published on March 21, 2013)
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