McLeod Russel has reported a net loss of ₹32 crore in the first quarter of the current fiscal against a net profit of ₹26.21 crore in the corresponding period a year ago. Crop loss in India and lower prices in the global market, particularly due to higher crop in Africa and Vietnam, were the reasons for the loss, the world’s largest tea plantation company said.

Dry weather conditions prevailed in the country during April-May, particularly in Assam, the company’s plantation area. Though tea production in the company’s plantations in Uganda and Rwanda were at the same level as last year, prices up to June for African teas were lower by 15 per cent.

Prices in India currently are higher by ₹20 a kg but lower inventory and production hit the net realisation of the company. According to Aditya Khaitan, MD, McLeod Russel, benefits of higher price would reflect in the financial accounts of the second quarter.

“The company has posted operating loss of ₹29 crore against operating profit of ₹21.72 crore last year. This is mainly attributed to a substantial loss of production by 6.2 million kg during the quarter,” the company said. “Sales are lower by 43 per cent on lower volume by 43 lakh kg. Staff cost has increased by ₹8 crore during the quarter on account of revision of wages in tea estates effective from January 1 this year. Consumption of raw material (cost of small growers’ leaf) is lower by ₹21 crore due to decrease in volume.”

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