Humble tea warms up for a turnaround
The 61st year of India’s independence has augured well for one of the country’s oldest industries - tea.
By Sutanuka Ghosal, ET Bureau |
KOLKATA: This may be pure coincidence. But the 61st year of India���s independence has augured well for one of the country���s oldest industries ��� tea. The tea business, which started out in 1838 under the patronage of Lord William Bentinck, lost its flavour post-1998. Prices crashed, production costs shop up and Indian tea lost major export markets to rivals like Sri Lanka, Kenya, Vietnam and China.
Infact, the tea industry hit rock bottom in the last decade. But come 2008, tea prices started inching up across all categories ��� CTC, dust, orthodox and Darjeeling. By early August, CTCs and dust tea prices shot up by Rs 25/ kg compared to last year. Price of orthodox teas flared up by Rs 40/kg, with Darjeeling tea seeing a Rs 50/ kg rise.
���Post-1998, tea supplies in India outstripped demand leading to a sharp fall in prices. This happened due to proliferation of bought leaf factories. The entry of fast foods and other drinks impacted tea drinking habit of Indians and domestic consumption fell to 1.8% from a level of 2% to 2.5%,��� said Aditya Khaitan, MD of McLeod Russel India.
Tata Tea MD Percy Siganporia too feels Indian tea industry is seeing a turnaround. ���We expect most tea companies will be back to the profit regime,��� he says. On the export front, year 2008 has brought cheer to the Indian tea industry.
Infact, the tea industry hit rock bottom in the last decade. But come 2008, tea prices started inching up across all categories ��� CTC, dust, orthodox and Darjeeling. By early August, CTCs and dust tea prices shot up by Rs 25/ kg compared to last year. Price of orthodox teas flared up by Rs 40/kg, with Darjeeling tea seeing a Rs 50/ kg rise.
���Post-1998, tea supplies in India outstripped demand leading to a sharp fall in prices. This happened due to proliferation of bought leaf factories. The entry of fast foods and other drinks impacted tea drinking habit of Indians and domestic consumption fell to 1.8% from a level of 2% to 2.5%,��� said Aditya Khaitan, MD of McLeod Russel India.
Tata Tea MD Percy Siganporia too feels Indian tea industry is seeing a turnaround. ���We expect most tea companies will be back to the profit regime,��� he says. On the export front, year 2008 has brought cheer to the Indian tea industry.
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