Tea production slipped 2.18 million kg during the first seven months of the current fiscal, mainly due to slippage from the producing regions in South India. Production revealed divergent trends with output in Assam rising sharply, while production in West Bengal was under fair amount of pressure.
Sharpest drop
All the three producing States in South India registered a drop, with Kerala registering the sharpest fall. Production slipped 2.3 per cent to 196.16 million kg (mkg) over 200.78 mkg, recorded over April-October period last year.
The United Planters Association of Southern India had projected that south Indian tea production would slip by 1.8 mkg during October, while the actual fall was 2.1 mkg.
“The discrepancy between the actual and predicted fall was mainly on account of bought tea operations which our members are not able to fully capture,” sources in UPASI said. However, they did not anticipate major plunge in production in the coming month since lower Nilgiris production, which experienced heavy rains, was expected to be made up by better production from other south Indian states.
Hardest hit
Production in Kerala that was hit the hardest due to persistent drought-like conditions is expected to improve in the coming months. Mr N Dharmaraj, Vice-President–Tea, Harrisons Malayalam, said that the timely and adequate rains in November is expected to bolster production and the company expected the lower output during the first half of the year to be made up during the second half.
Even at the national level, things are beginning to look up. The production shortfall which was about 7.5 mkg in September-end has been bridged to 2.18 million kg by October-end.
Higher value realisation
Reflecting the shortfall in production, tea exports have plummeted eight per cent in volume during April-October period.
However, the unit value realisations have spurted 15 per cent to Rs 139 from Rs 121 a kg a year ago. Correspondingly, the total value realisations have also gone up to Rs 1,555 crore up from Rs 1,457 crore.
The tea export volumes are not expected to strengthen in the coming months either. Nilgiri orthodox grades constitute a significant portion of south Indian tea exports both in volume and value.
But incessant rains and flooding in most Nilgiri plantations during last month is expected to reduce production of the high quality orthodox grades in the coming months.
Pick up unlikely
As a result, tea export volumes from South India are not expected to pick up in the coming months, sources in the industry said and added that export prices are likely to remain firm.
A persistent global mismatch between demand and supply is one of the important reasons for the firm global price trends.
Recent reports indicate that there is a global production deficit of 70-75 mkg this year.
Source : Business Line