Agri Business

Cold weather clouds tea crop prospects in Assam, Bengal

Shobha Roy Kolkata | Updated on November 21, 2017

With tea season on, plucking has started in Dooars region in northern part of West Bengal.

Industry could be hit if premium second flush is affected

While the rest of the country is reeling under heat wave, tea planters in Assam and North Bengal are fearing adverse impact on the premium second flush crop due to lack of sunshine.

Typically, the second flush arrives in the market by May-end and it is considered to be of the best quality fetching higher value.

Naturally, an adverse impact on the crop limits the profitability of the industry.

First flush crop flat

According to C.S. Bedi, the production of second flush crop has been slow during the first 18 days of this month on account of “dull and cold weather” in Assam.

“Though the last three-to-four days has been bright with good sunshine, we expect the May crop in Assam Valley to be either flat or slightly poor compared with the same period last year,” Bedi told Business Line.

The second flush crop requires adequate heat and sunshine.

“Poor sunshine might also lead to pest attack, thereby, affecting a part of the crop,” said Sujit Patra, Joint Secretary of Indian Tea Association.

While the production of first flush tea crop (March-April) in Assam was flat this year compared with last year, in North Bengal, Dooars and Terai production was slightly better, Patra said.

Darjeeling Tea

The second flush Darjeeling crop is also estimated to be almost flat this year.

According to Sheo Shankar Bagaria, Chairman of Darjeeling Tea Association, there has been a 15 per cent decline in the first flush of the crop this year.

“Sunshine has been poor so far. Though it is early to comment on the exact production of second flush crop, we expect it to be more-or-less flat this year,” he said.

Prices

While the country’s tea production so far during this year has been either flat or slightly lower compared with last year, it has not translated into a rise in prices.

In fact, the average price of CTC and dust has either been flat or marginally subdued this year compared with last year.

The average price of CTC leaf was lower by nearly four per cent at Rs 153.28 a kg at the Sale No. 20 held on May 17 compared with Rs 160 a kg during the same period a year ago.

The average dust price was down by nearly three per cent to Rs 162.66 a kg (Rs 168 a kg in Sale 20 last year) in 2013.

“Despite a good demand the prices have not been too good this year,” Patra said. However, the average price in May is higher by about 5-6 per cent compared with January-March period.

The improvement in quality of tea crop in April-May has led to the rise in prices, an industry insider said.

Santanu Sanyal reports: It will be another two to three weeks before the second flush North Indian tea arrives at the auctions, according to industry sources.

“We expect auctions of the second flush to start from the Sale No. 26,” a sources said.

“This week it is Sale Number 21 but we’ve received the catalogues for Sale Nos. 22 and 23 and teas for Sale No. 24”.

But then arrival is one thing and putting on auction is another.

There is a gap op of 19 days between the two, it is pointed out.

However, it is also felt that direct sales, both domestic and exports particularly those having forward contracts, of second flush might have already started.

The trend so far suggests that the arrivals at Kolkata auction will be good as also the prices.

Last year, Sale No. 21 saw 1.7 lakh kg orthodox tea being sold; this year, it is 3.8 lakh kg.

The price of orthdox tea, too, is up by over Rs 40 a kg compared with last year.

The top quality CTC price is also up by Rs 40-50.

“The best of Assam teas is commanding a premium, ” said the source. Assam teas account for more than 80 per cent of offerings at Kolkata auction.

An estimated five million kgs out of the total estimated production of 8.5 million kg of Darjeeling tea are offered for direct sales.

Only about 3.5 million kg come for auctioning, entirely at Kolkata auction.

The average price of Darjeeling too is higher. At Sale No. 20, the price was Rs 378.71.



drought hit

The crop in Darjeeling, Dooars, Terai and Baraka Valley ( Cachar) in Assam was hit by drought.

According to Tea Board sources, till the end of April, the Barak Valley crop was down by 67 per cent, Darjeeling 30 per cent, Terai 31 per cent and Dooars 17 per cent.

Interestingly, despite poor crop in Dooars and Terai, offerings at Siliguri auction this year have not declined.

Between April and the third week of this month, the offerings improved by an estimated 2.5 million kg.

The tea industry attributes this to tea growers in the unorganised sector supplying tea to auctions through the bought leaf factories.

shobha.roy@thehindu.co.in

santanu.sanyal@thehindu.co.in

Published on May 22, 2013

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