A highly placed official told UNI that till December, 1998 there was an excess supply of around 100 m kg teas worldwide and it is unlikely that prices would rise abruptly unless there was a shortfall of more than that quantity.

Sources said till the existing stocks were exhausted, it is not possible to know about the way market is likely to behave. However, till now no increase in prices were reported from any of the major markets of the world, sources added.

Incidentally, the latest available figure indicates that till April this year, the output in major tea producing countries witnessed a sharp fall of around 80.95 m kg due to severe drought during the first three months of the year.

Of these, the highest shortfall of 40.85 m kg was reported from India, 36.30 m kg from Kenya, 3.80 m kg from Bangladesh and another about 3.00 m kgfrom Malya, sources said adding the figures from Sri Lanka and other regions were not available. However, it is expected that Sri Lankan crop was unlikely to suffer as weather was more or less favourable there.

Tea Board sources said although the weather in tea producing areas of north India improved considerably between April and May, giving sufficient indication that setback suffered in the initial months would be made up in the coming months, about ten per cent of the plants were still to witness proper growth of bushes.

He said the position would be clear by July on whether there would be a shortfall in output or the things would improve.

Meanwhile, Tea Association of India president Arvind Newar yesterday said in a statement that shortfall in tea production coupled with the absence of Russian purchase has put the Indian industry in a severe financial crunch.

He said crop loss due to prolonged drought, rise in other inventory prices and labour cost would increase the product cost, which could goup to Rs 13 to Rs 14 per kg.

Tea Board sources further said that over the years, it was found that there was virtually no increase in consumption of tea in developed countries despite many efforts, but in developing countries like India and China the consumption was up marginally.