South India’s Q1 tea output likely to slip 15-20% on truant weather

Industry sources foresee a 15-20 per cent drop in South India’s tea production at the end of the first quarter of the current calender year.

Speaking to BusinessLine , a source said that 2019 started off on a positive note with the Nilgiris tea sector — one of the largest tea growing regions in the South — recording a marginal increase of 1.6 million kg in production, which is up 12.67 per cent compared to the corresponding month of the previous year.

15-20% decline

Tea production increased to 13.96 million kg in January 2019 against the year-ago volume of 12.39 mkg.

“But the trend has reversed in the subsequent months because of rising temperature and lack of rain in the hill district. The drop is expected to be significant at 15-20 per cent in February and March,” said a spokesperson from UPASI.

The association is expecting the slide to spill into the next quarter too.

“The last few years have been pretty bad for the tea sector. And it is not just the rising temperature; the fund provisioning for the industry has also taken a hit,” the source said.

No price rise

The production hit an all-time low in 2018 at 218.5 mkg from an average of 230+ mkg during the earlier two years.

The steep decline in production does not seem to have triggered any price rise at the auctions.

“The price has been steady, quoting ₹1-2/kg higher compared to the earlier week,” a source at the Coimbatore auction centre said, adding “it hasn’t made much of an impact. The teas that are traded here are generally quoting above ₹100/kg. The average rate of the dust grade hovered around ₹108last week and close to 90 per cent of the offered volumes were taken up.”

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