G' morning! Your cup of tea's costlier
Now waking up to that strongly refreshing cup of piping hot tea is all set to become even tougher.
By TNN |
KOLKATA: Indian Tea Association (ITA) has warned the country will face tea shortage this year. In its latest report on tea industry, the trade body has said based on the domestic consumption, exports and carry-over stock positions, the shortage is likely to be 27m kg.
The report says the country will produce 930m kg and export 195m kg in the current year. Which means the industry will miss the commerce ministry’s export target of 200 million kg for ’06. ITA has pegged domestic consumption at 805m kg based on a 3.3% annual growth rate.
Accordingly, the country will require 1,000m kg of tea to meet its export obligation and domestic requirement. With production levels of 930m kg and expected imports of 20m kg, total availability of fresh tea in the country will be 950m kg.
The year started with carry-over stocks of 23m kg. Taking into account the carry-over stock, the association has pegged overall supply at 977m kg. That means there will be a shortage of 27m kg in ’06. With a shortage of 27 million kg, the ITA is hopeful the industry will recover from the bad phase, which it had been experiencing over the past six years.
But it is concerned about the lower output of orthodox tea which fetches better prices in local and overseas markets as well. Recent price movements show Indian tea which earlier had to jostle with other countries is commanding better prices in world market as well as in domestic market.
This has happened since there’s a huge global shortage of tea this year. Against a world production of 794.4m kg in January-June ’05, production this year fell to 739.4m kg in the same period. If the crop scenario does not improve there will be further hardening of prices in the world market at the end of ’06 and India will be no exception.
On the export front, the current year has started on a subdued note. During first six months of the current year, total tea exports were lower by 1.5m kg. Exporters, however, are optimistic and hope that this trend could be arrested as soon as the second flush crop becomes available.
The report says the country will produce 930m kg and export 195m kg in the current year. Which means the industry will miss the commerce ministry’s export target of 200 million kg for ’06. ITA has pegged domestic consumption at 805m kg based on a 3.3% annual growth rate.
Accordingly, the country will require 1,000m kg of tea to meet its export obligation and domestic requirement. With production levels of 930m kg and expected imports of 20m kg, total availability of fresh tea in the country will be 950m kg.
The year started with carry-over stocks of 23m kg. Taking into account the carry-over stock, the association has pegged overall supply at 977m kg. That means there will be a shortage of 27m kg in ’06. With a shortage of 27 million kg, the ITA is hopeful the industry will recover from the bad phase, which it had been experiencing over the past six years.
But it is concerned about the lower output of orthodox tea which fetches better prices in local and overseas markets as well. Recent price movements show Indian tea which earlier had to jostle with other countries is commanding better prices in world market as well as in domestic market.
This has happened since there’s a huge global shortage of tea this year. Against a world production of 794.4m kg in January-June ’05, production this year fell to 739.4m kg in the same period. If the crop scenario does not improve there will be further hardening of prices in the world market at the end of ’06 and India will be no exception.
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On the export front, the current year has started on a subdued note. During first six months of the current year, total tea exports were lower by 1.5m kg. Exporters, however, are optimistic and hope that this trend could be arrested as soon as the second flush crop becomes available.
Amid this, pesticide issue has again come up in a big way from some countries like Japan causing concern for Indian exporters. The association as well as the Tea Board has identified Pakistan, Iran and Egypt as the three major countries for exports of tea in the current year.
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