The year 2023 was a mixed one for the plantation sector with price recovery noticed in the case of pepper and cardamom, while coffee prices sustained but at a lower level compared with the previous year.

The scenario in tea and rubber was completely different with prices declining steeply and below the cost of production, according to C Shreedharan, President, United Planters Association of Southern India (Upasi).

Excess supply

The main reason for the decline in prices in tea has been excess supply in the global market vis-a-vis the lower export demand due to global headwinds whereas in rubber, various factors such as declining demand from China the major consumer, lower oil prices, global economic crises are contributing factors, he said.

In tea, he said Indian production till October 2023 was lower by 3.28 million kg (mkg) at 1,163.06 mkg. South India production during this period was marginally higher by 1.44 mkg and estimated at 197.44 mkg. Anticipated production during 2023 for South Indian is estimated to bear around 230-235 mkg.

Tea exports were lower by 8.19 mkg. Decline in exports from South India was marginal by 1.38 mkg, whereas North India reported lower exports by 6.81 mkg. The main reason was lower exports to Iran with the quantum of exports declining from 18.64 mkg to 3.77 mkg in 2023. Similarly, Russia’s intake from India declined by 5.51 mkg and UAE by 4.42 mkg.

Losing steam

In coffee, the post-blossom production estimate for 2023-2024 was placed at 3,74,200 tonnes, which is lower than the post-blossom estimate of 3,93,000 tonnes during 2023. Exports registered a decline of 0.17 lakh tonnes (lt) and were estimated at 3.96 lt in 2022-23 against 4.14 lt achieved during the previous year.

In rubber, the Upasi president said the domestic production during 2022-23 was estimated at 8.39 lt whereas the consumption was estimated at 13.50 lt. During the current year — 2023-24, as per Rubber Board projections, the production is estimated to be higher at 8.70 lt whereas consumption is estimated to increase to 14.1 lt.

Natural rubber prices during 2023 declined to ₹149.39 per kg from ₹162.21 per kg reported in 2022, a decline of 8 per cent. The declining demand from China, the major rubber consumer, lower oil prices and the global economic crisis have all contributed to the price decline.

Weather aids recovery

Small cardamom production for 2022-23 was estimated at 24,464 tonnes, an increase of 1,123 tonnes compared to the previous year. However, the production during 2023-24 was initially expected to decline by 30-40 per cent due to severe shortage of rains during the initial part of south-west monsoon period, as the rainfall during June to August was lower by nearly 60 per cent in the cardamom-growing regions of Kerala.

However, the second leg of the South-West monsoon that commenced from September and the good setting of the North-East monsoon thereafter aided the crop prospects and the latest estimate indicates that the production would be the same as last year or marginally higher.

The Spices Board’s estimate for black pepper production in 2022-23 stood at 64,000 tonnes. However, the production is expected to rebound during 2023-24 as the weather was conducive for better crop settings and more areas were brought under pepper in new areas. From January to November 2023, the average price reached ₹554.70 per kg.