Export slowdown unlikely to hurt tea prices
Expectations of a slowdown in tea exports are unlikely to hurt prices of the commodity in the domestic market.
By PTI |
MUMBAI: Expectations of a slowdown in tea exports are unlikely to hurt prices of the commodity in the domestic market.
Exports presently constitute less than 26 per cent of the domestic tea production. A high domestic demand, coupled with the low opening stock, is expected to keep the domestic market for tea tight, according to the Centre for Monitoring Indian Economy (CMIE), an independent think-tank.
Tea prices have been steadily increasing in the past few months from Rs 61.12 per kg in January 2007 to Rs 65.07 per kg in April 2007 and rose to a peak of Rs 71.92 per kg in July. Earlier, the prices had picked to Rs 70.98 per kg in September 2006.
Exports of tea rose by a robust 64.2 per cent to 56.8 million kgs during January-March 2007. However, CMIE expects exports to remain subdued in the coming months because of the strengthening of the Indian rupee against the US dollar.
The tea industry is also likely to miss the target of 210 million kgs exports this year, CMIE said.
The reasons for the drop in exports are also attributed to decreased exports to Iraq due to payment problems. The appreciation of the rupee has resulted in a loss of Rs 4-5 per kg of tea exports. Tea exports to violence-affected Iraq have declined to 3.35 million kgs in Jan-Apr 2007 from 10.54 million kgs in Jan-Apr 2006.
Industry had forecast tea output to rise by three per cent to 984.6 million kgs in 2007. However, looking at the current sluggish trend and adverse weather conditions in Assam and Nilgiris, it is feared that the actual production may turn out to be a little lower than the forecast.
Between January and June this year, the country's tea production increased by a meagre 0.01 per cent at 3,34,710 tonnes, up from 3,34,669 tonnes in the same period of last year, according to statistics compiled by CMIE.
The country's largest tea producing region, Northern India, registered 1.58 per cent jump in production to 2,25,336 tonnes in January-June 2007 from 2,21,826 tonnes in the corresponding period last year.
Southern India also posted 3.07 per cent decline in tea production at 1,09,374 tonnes in January-June 2007. Kerala's tea output dipped sharply by 11.80 per cent, from 35,539 tonnes to 31,344 tonnes in January-June 2007.
Karnataka reported a 5.48 jump in production at 2,617 tonnes and Tamil Nadu 0.79 per cent at 75,413 tonnes in the six months period ended June 2007.
Exports presently constitute less than 26 per cent of the domestic tea production. A high domestic demand, coupled with the low opening stock, is expected to keep the domestic market for tea tight, according to the Centre for Monitoring Indian Economy (CMIE), an independent think-tank.
Tea prices have been steadily increasing in the past few months from Rs 61.12 per kg in January 2007 to Rs 65.07 per kg in April 2007 and rose to a peak of Rs 71.92 per kg in July. Earlier, the prices had picked to Rs 70.98 per kg in September 2006.
Exports of tea rose by a robust 64.2 per cent to 56.8 million kgs during January-March 2007. However, CMIE expects exports to remain subdued in the coming months because of the strengthening of the Indian rupee against the US dollar.
The tea industry is also likely to miss the target of 210 million kgs exports this year, CMIE said.
The reasons for the drop in exports are also attributed to decreased exports to Iraq due to payment problems. The appreciation of the rupee has resulted in a loss of Rs 4-5 per kg of tea exports. Tea exports to violence-affected Iraq have declined to 3.35 million kgs in Jan-Apr 2007 from 10.54 million kgs in Jan-Apr 2006.
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India's tea production declined by 2.4 per cent in Assam and 3.1 per cent in the South. The country produced only 334.7 million kgs of tea during January-June 2007, almost equal to the amount produced in the same period of the previous year.Industry had forecast tea output to rise by three per cent to 984.6 million kgs in 2007. However, looking at the current sluggish trend and adverse weather conditions in Assam and Nilgiris, it is feared that the actual production may turn out to be a little lower than the forecast.
Between January and June this year, the country's tea production increased by a meagre 0.01 per cent at 3,34,710 tonnes, up from 3,34,669 tonnes in the same period of last year, according to statistics compiled by CMIE.
The country's largest tea producing region, Northern India, registered 1.58 per cent jump in production to 2,25,336 tonnes in January-June 2007 from 2,21,826 tonnes in the corresponding period last year.
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West Bengal registered 10.11 per cent jump in production at 77,149 tonnes during January-June 2007 as against 70,066 tonnes in same period last year. However, Assam reported a decline by 2.42 per cent at 1,46,372 tonnes in the six months period ended June 2007 from 1,50,004 tonnes.Southern India also posted 3.07 per cent decline in tea production at 1,09,374 tonnes in January-June 2007. Kerala's tea output dipped sharply by 11.80 per cent, from 35,539 tonnes to 31,344 tonnes in January-June 2007.
Karnataka reported a 5.48 jump in production at 2,617 tonnes and Tamil Nadu 0.79 per cent at 75,413 tonnes in the six months period ended June 2007.
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