South Indian tea production to drop for fifth successive year

KOCHI: The tea crop in South India is heading for a slump for the fifth successive year as the period from January to July 2013 has shown a declining trend. Taking into account the initial estimates for August, the United Planters' Association of South India ( Upasi) has calculated the cumulative drop in the production till August to be 10 million Kg, which it says, is unlikely to recouped in the remaining four months.


Upasi president Peter Mathias attributed the loss in production to weather conditions that prevailed during the year. "In the first quarter there was a drought -like situation which was followed by excessive rain and overcast conditions that were not conducive for the crop prospects in the second and third quarters," he said.

In the first seven months, the tea crop was lower by 5.7 million Kg. In August the crop has fallen by 25% as per initial reports, which translates to a decline of 4.3 million Kg.

The low production coupled with higher domestic intake has resulted in buoyant prices. The average price for the January-August period is estimated at Rs 102.23 per Kg compared with Rs 84.24 per Kg in the corresponding period of the previous year. The price of CTC variety was higher by Rs 17.99 per Kg while the orthodox variety sold higher by Rs 19.10 per Kg.

The change in product mix in favour of CTC teas to satisfy the increased domestic demand needs has resulted in higher volume of tea routed through auctions.

Peter Mathias said given the market fundamentals, the price should remain moderately bullish in the months leading to the festival season.