McLeod Russel, the world’s largest tea producer, is hopeful of a recovery in Assam crop during n May-June if weather conditions improve in the days to come. According to industry estimates, April tea production is down by 30-40 per cent in Assam due to an unusual dry spell. In a release issued on April 23, the Indian Tea Association expressed concerns over the crop prospects due to “drought conditions.”
Kamal Kishore Baheti, CFO of McLeod, admits that April crop output is down. However, since April is not a major production season, it would be incorrect to project the annual crop estimatesat this juncture. Tea production increased 6.5 per cent to 1,200 million kg in 2013. Though official estimates are not available, industry sources expect production to remain stagnant during January-March this year.
Higher production notwithstanding, there was no decline in tea prices in India in the last season.
This is in sharp contrast to major international markets such as in Kenya where tea prices are still ruling low due to over production in 2013.
“Prices are low in Mombassa (Kenya). We expect international prices to firm up in the next two to three months once the carry forward stock is extinguished,” Baheti said.