Tea production in India during January-December 2021 has witnessed a near six per cent growth over same period last year. However, this is still a nearly four per cent decline in crop compared to the pre-pandemic period of 2019 (January-December 2019). The decline in production is likely to keep prices firm, said industry insiders.

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The country’s tea production is estimated to be close to 1,329.04 million kg (mkg) in 2021, as per provisional data available on the website of the Tea Board of India — 71.5 mkg higher than 2020’s 1,257.53 mkg. but 61.04 mkg lower than the production of 1,390.08 mkg in 2019.

The industry compares the current year to the pre-pandemic year of 2019 because the steep decline in production due to Covid induced lockdown during the peak plucking months make 2020 an aberration year. The shortfall in production is more than the 40-45 mkg the industry had estimated earlier.

Production in North India — which includes gardens in Assam and West Bengal — is estimated to be lower by nearly 77 mkg at around 1,093.38 mkg while that in South India is likely to be higher by around 16.67 mkg. It is to be noted that North India accounts for nearly 84 per cent of the country’s total tea production.

‘Flush out excess tea’

According to Vivek Goenka, Chairman, Indian Tea Association, the shortfall in production in North India has helped to flush out excess supply of tea from the system which augurs well for the industry as it will help keep prices firm.

“The North Indian crop is down by nearly 76 mkg over 2019. This, coupled with lower production last year has eradicated the excess supply from the system. So when the new teas arrive in March, we expect the market to be firm,” Goenka told BusinessLine.

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The average price of North Indian teas during mid-December for all auction centres was up by nearly 10 per cent at ₹188.27 a kg this year against ₹171.65 a kg last year. Prices were up by nearly 26 per cent against ₹149.48 in 2019. 

“It is estimated that nearly 200 mkg of tea is out of the pipeline over the last two years and this will keep prices of tea — particularly CTC — firm till July this year. In case of orthodox, there has been a decline in production due to lack of incentives, so the lower availability will help increase prices by nearly 10-15 per cent,” said Vikram Singh Gulia, MD & CEO, Amalgamated Plantations Private Ltd (APPL).