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Tea industry in India revives

All-India tea production rose by 12.3% to 1.62 lakh tonnes during January-April 2010. The Southern states performed better than the Northern counterparts. The states of Tamil Nadu, Kerala and Karnataka recorded between 13-24% y-o-y growth. Production in Assam–the largest tea producing state in India, recorded a 9.6 per cent growth.

India is the second largest producer of tea in the world with production at 979 million kg in 2009. Following the prediction of a normal monsoon forecast by the India meteorological department, the Tea Board had earlier said that production in 2010 could be around one billion kg. However, achievement of that target looks dicey. This is because Assam has witnessed excessive rains and pest attacks which have already impacted production in Assam, state media reports.

India’s tea exports, which rose steadily in the first four months of 2010, are also expected to be hit. India exports CTC (crush-tear-curl) variety of tea mainly to Egypt, Pakistan and the UK and the premium orthodox variety of tea to Iraq, Iran and Russia.

Tea exports had declined by 6.2% in 2009 but are expected to rise in 2010. On account of a shortfall in production from the major tea producing countries in 2009, the industry is believed to have begun the year with low opening stocks. On the other hand, global tea consumption is rising at a steady pace. Thus, the tight demand-supply situation in the global market and an increase in the domestic output will enable the Indian tea industry to see a partial recovery in its exports.

Tea prices, which showed signs of easing in March, are already moving northward. Tea prices in India have risen from Rs75.6 a kg in March 2010 to Rs.97.5 a kg in May. However, prices were 16.2% lower than the year-ago level.

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Categories: Agriculture, Tea
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