Having lost significant crop in the first six months, including part of the monsoon crop, the tea industry may be headed for decline in production in 2012.
Data with the Tea Board till May, coupled with the Indian Tea Association’s (ITA) June crop estimate in North India, indicate tea production is down by at least 31 million kg (mkg) during January-June 2012.
According to sources in ITA, except for a dramatic recovery in July-August, it will be difficult for the industry to maintain last year’s production levels.
Crop loss
According to data available with Tea Board, the country’s total tea production is down by 28 mkg or 11.5 per cent to 215.82 mkg during January–May this year.
ITA survey estimates further 3 mkg crop loss by member North Indian gardens in June, due to unfavourable weather conditions. Unofficial estimates suggest combining small growers, the actual crop loss should be much higher. “June, July, August and September are the heavy cropping months. A portion of the loss in crop can be made good if rainfall is adequate and weather is favourable during these months,” an ITA official told Business Line .
It would, however, be difficult to make good for the entire loss in crop, he added.
Prices
The auction data from Kolkata indicate that average prices of both CTC and orthodox were higher by nine per cent and 47 per cent in sale 29 held in July this year as compared with last year.
In Kolkata, average orthodox prices were Rs. 236.70 a kg (Rs 160.66 a kg in sale 29 last year) and average CTC prices were at Rs 151.58 a kg (Rs 138.56 a kg last year) in sale 29 in July.
“Though the prices are ruling high but it is still not able to offset the drop in production. This is because costs have gone up this year. Labour costs have increased by 35-40 per cent due to the wage re-agreement,” the ITA source said.