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Sri Lankan tea supplies are likely to hit India's export prospects in the coming months.
Sri Lanka Tea Board has now predicted 10 per cent growth in the island's tea export in 2011.
Sri Lanka's tea production declined to 32.09 million kg (mkg) in May from 33.89 mkg but because of higher production in earlier months, the overall production in the first five months has risen marginally – by 1.59 mkg to reach 139.70 mkg.
Currently, rain is helping it to produce a steady crop. “We expect Sri Lanka to produce more crop and supply orthodox teas to the global market in the next few months. However, the teas are likely to be of medium quality. So, Indian manufacturers should ensure the supply of best quality orthodox teas to net high returns. Good quality teas are fetching Rs 30-40 more per kg than medium grades,” Mr Subodh Paul, Director, Contemporary Brokers Pvt Ltd, told Business Line.
The CIS, Dubai, Syria, Turkey and Iraq are currently competing to buy Sri Lankan teas. This week, the best quality Sri Lankan orthodox teas fetched Rs 170-220 a kg against Rs 200-250 for North Indian teas and Rs 95-105 for South Indian teas.
The low-end Sri Lankan fannings got Rs 110-130 against Rs 80-90 for North Indian and Rs 50-60 South Indian teas. The CIS, West Asia, Germany and Japan were supporting Indian tea exports.
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