Indian tea prices firming up, exports up, production down

GUWAHATI - The beleaguered Indian tea industry is on a comeback trail with exports increasing and prices firming up in the weekly auctions despite adverse climatic conditions hitting production and rampant pests eating away the crop in some areas.

“Exports rose by about 14 million kg to 107 million kg from January to August, compared to the corresponding period in the previous year and this is surely a very healthy trend,” Dhiraj Kakaty, secretary of the Assam chapter of the Indian Tea Association (ITA), the apex tea administrative body of major tea growers, told IANS.

Last year, India exported 180 million kg of tea.

India is the world’s largest tea producer after China and produced a record crop of 980 million kg last year with the northeastern state of Assam accounting for about 55 percent of the total output.

“We are fetching good average prices in the weekly auctions with a kg of tea sold at Rs.130, which is about Rs.30 higher than what we got last year in the same period between January and August,” said Kakaty.

“The overall mood is vibrant with the Indian tea industry now beginning to look up. Overseas demand is on the increase and prices are also firming up mainly due to very good quality teas produced by us,” he said.

Pakistan, Egypt, Iran and Iraq and other countries in the Middle East figured prominently in the export list.

India’s $1.5-billion tea industry has been in a slump since 1998, with prices and exports plummeting because of weak domestic demand and increased international competition, coupled with poor quality tea produced in the country.

Tea production, however, has been hit by adverse climatic conditions - a mix of drought and spells of very heavy rains led to crops suffering.

“There has been a production loss of about three million kg from January to August this year compared to the same period in 2009 and going by the present trend it is unlikely we are going to touch last year’s production figures of 980 million kg,” Kakaty said.

“The weather conditions are not favourable with some parts facing drought, while heavy rains in some areas affected crops.”

Adding to the woes of the cash-strapped industry are rampant pests that are eating up tea crops. A tea mosquito called helopeltis has attacked some 100 plantations in various parts of Assam.

According to tea growers, the bugs tend to attack plantations when the young leaves turn brown.

(Syed Zarir Hussain can be contacted at zarir.h@ians.in)