Tea shares in demand as cos hike prices

MUMBAI: Shares of tea manufacturers picked up steam amid reports that after regional and national tea marketing companies have decided to raise tea prices by Rs 40 per kg from on the back of a supply shortfall in major producing regions, India, Kenya and Sri Lanka.

The price hike will be undertaken in two stages -- Rs 15-20 from May 15 followed by another hike in June. Tata Tea and Hindustan Unilever, which represent nearly 70% of the market, may also increase the prices.

Tea production in year 2008-09 was approximately 891 million kg which is 35-40 million kg lower than the year-ago. The prices of tea thus increased by approximately 55-60% in the previous financial year and that compared with FY08. Retail prices had not been increased proportionately.

At 10:55 am, shares of Tata Tea Ltd were up 3.92 per cent at Rs 700, Harrisons Malayalam surged 10.73 per cent at Rs 77.90 and Jayshree Tea & Industries Ltd advanced 11.54 per cent at Rs 162.40.