Good times await Indian tea makers

KOLKATA: A drop in African tea production by 35 million kg this year has put Indian tea producers in an advantageous position. With a good production till date, Indian tea producers are flooded with export enquiries, which in turn are giving a fillip to tea prices.

On an average, prices have gone up Rs 10-15 per kg and industry majors like McLeod Russel, Goodri-cke Group, Dhu-nseri Tea and Jay Shree Tea feel that this trend is likely to continue during the second flush production as well.

AN Singh, managing director of Goodricke Group, told ET: "The production is expected to be up by 10 million kg in May. The situation is much better this year production-wise. Overall, the price has increased by 10-15 per kg for good teas. Last year, a pest attack affected production during the second flush." J Kalyansundaram, secretary of Calcutta Tea Traders Association,said: "In sale 22 of this year, the average CTC price is hovering around Rs 133 per kg as compared to Rs 119 last year.

Orthodox tea is selling in the range of Rs 160 - Rs 220 per kg. Last year, the range was Rs 140 - Rs 200 per kg. Definitely, tea prices are ruling firm this year. The second flush teas will be available from sale 26 and sale 27."

Industry officials feel that a drop in Kenyan tea production will further give a boost to Indian tea prices as export enquiries have started to pour in from Russia, the Middle East countries, the UK and the US.

In fact, the Tea Board of Kenya has indicated that tea production in 2011 could be 10% lower, owing to low output over the last four months. According to the board, due to hot and dry weather conditions experienced in January to March and depressed rainfall in April, cumulative tea production for the period January to April 2011 stood at 116.6 million kilogram, which was 20.9% lower compared to the output of 147.5 million kg recorded during the first four months of 2010.

CK Dhanuka, chairman of Dhunseri Tea, said: "Tea market is good now. Kenya is down by 35 million kg and this will put pressure on the global supply side. Therefore, I feel that market is likely to remain bullish in the coming months."

DP Maheshwari, managing director of BK Birla-controlled Jay Shree Tea, said: "Except for south Indian teas, prices have gone up by Rs 15 - Rs 20 per kg. Assam teas are fetching very good prices and, going ahead, I feel that this trend will continue."