India 2010 tea export seen hit by rain, low temprature

KOLKATA: India's tea exports, whichrose steadily in the first four months of 2010, are expected to be hit byexcessive rain and low temperatures in north India, a top official of Indian TeaAssociation said on Thursday.

"Production has been severely affectedin Assam, due to excess rain and low temperature during May and June. This mighteffect the overall production and export targets for the current year," AdityaKhaitan, Chairman, Indian Tea Association, told Reuters.

India'stotal exports in 2009 fell 5.7 per cent to 191.5 million kg, but the trendreversed in December when they rose 36.9 per cent to 22.24 million kg for themonth, Tea Board data showed. During the Jan-April period, total exports jumped20 per cent to 60 million kg compared to 49.8 million kg in the same period lastyear and various industry estimates indicated that exports during 2010 couldcross 205 million kg.

India exports CTC (crush-tear-curl) variety oftea mainly to Egypt, Pakistan and the UK and the premium orthodox variety of teato Iraq, Iran and Russia. Total production in Jan-April was up 12 per cent to162.3 million kg from 144.5 mln kg a year ago, Tea Board data showed. "Thoughthe industrywise data is still awaited, going by the production figures ofMcLeod Russel , at present, this excess crop of till April hasbeen nullified and we are further down compared to last year," Khaitan, who isalso the managing director of McLeod Russel, said.

In north India,which mainly includes the Assam Valley, the largest tea growing region in thecountry, the total production during the first four months of 2010 stood at 88.1million kg compared to 80.2 million kg a year ago, an excess production of 7.8million kg, Tea Board data showed. "Going by the present scenario, I don't seeIndia's total tea production during the current year going up, it could even belower compared to 2009," he added.

McLeod Russel, India's largest teaproducer and exporter, manages 47 tea estates in Assam Valley and produced morethan 80 million kg of black tea during FY10. Faced with severe drought in themajor tea producing areas during 2009, India's total tea production fellmarginally to 978.9 million kg from 980.81 million kg in 2008. This year, goingby the normal weather conditions during Jan-April, the industry expected totalproduction of 990 million kg, a Tea Board official said on condition ofanonymity. "We are waiting for the final figures of June, and then if this trendcontinues we might have to revise our outlook downward for the year 2010," headded.

Though the extent of crop loss during May-June is not known,it is estimated to be between 20-30 per cent on a year-on-year basis, whichwould firm up the prices further, said D.P. Maheshwari, managing director,Jayshree Tea.

Tea prices, which showed signs of easing in April, arealready moving northward in June, said a senior official of Calcutta TeaTraders' Association, who did not wish to be named. As per Tea Board data,during Jan-April, average tea prices across various auction centres was up by2.46 rupees per kg, at 87.07 rupees, compared to 84.60 rupees a yearago.

"However, if we see the auction prices only for the month ofApril, the average tea prices stood at 86.37 rupees per kg, down by 12.84rupees, from 99.21 rupees in the corresponding month a year ago," said S Patra,Jt Secretary, Indian Tea Association. One kg of quality tea was trading 15-20rupees higher in the first two weeks of June compared to last year, Khaitansaid.

ADVERTISEMENT

"The total pipeline shortage which was 60 million kg at thestarting of 2010, is expected to go up to 70-75 million kg during the start ofnext season, hence the prices will go up," Khaitan added.