A near repetition of the 1997 beginning with severe drought conditions affecting global tea production, estimates show that there would be a shortfall of almost 60-70 million kgs between India and Kenya. Hence, the prices would be on the watch list.

According to industry analysts although it is too early to comment on prices per se, Kenyan production would also be an important factor for determining global prices.

Recent estimates have shown that Kenyan production is almost less by 28-30 mkg upto March this year. Prices would also be determined by the Indian government's idea on imports of tea.

The domestic tea industry is currently grappling under dry weather with a marked absence of rains and near-drought conditions over Assam and West Bengal in the months of Februaryand March.

Pipeline stocks happen to be fast depleting, with new arrivals of teas at the auction centres just about trickling in. Calcutta has called off its first auction in the month of April as a result.

With most of the first flush crop being affected due to dry weather conditions in February and March, much depends on production during April which produces a much higher crop usually. The March and April crops generally produce the new season teas.

A regular monthly crop to serve the large domestic market in India is essential, given the fact that the country has a consumption of 1.5 mkg to 2 mkg per day.

New season teas are now selling for almost Rs 120 per kilogram. This is primarily on account of lesser teas available as well as on account of new season teas which fetch higher prices, said a broker.

Meanwhile tea traders have become wary of the shortage situation and have blamed direct sales leading to aggravation of shortage conditions. The intervention of the Tea Board is a necessity atleast until the month of May, said PO Desai, chairman of Federation of All India Tea Traders' Associations.

"Every single kg of tea produced during this time including north and south India should come under the hammer in auctions. It is also important that progress should be fair and there should be no withdrawals of any teas particularly at this time of the year", Desai added.

The months of February and March account for almost 60 million kg on an all-India basis which is shared almost equally between north and south India.The combined two months average this year is likely to be lower than the previous year's averages. Much depends on production levels in April.