Tea output shortfall widens on weather woes

Written by Rohit Khanna | ROHIT KHANNA | Kolkata | Updated: Nov 10 2010, 15:49pm hrs
As the October production of tea is likely to come down owing to fluctuating weather, shortage in the pipeline stock of Indian tea seems to be around 70-80 million kg (mkgs) this year. A good crop in September lifted spirits of the industry but it seems to be far from compensating losses made earlier this year.

The Indian tea industry started the year with a shortage of about 50 mkgs, a shortage in production for the third consecutive year.

All India production during September this year crossed 108 mkgs against 101.4 mkgs during September 2009. Assam production touched almost 63 mkgs against 55.6 mkgs during September last year while production in West Bengal was 24.2 mkgs against 20.8 mkgs for the corresponding period in 2009.

While North Indian production was up by almost 11 mkgs during September, South Indian production was down by 4.2 mkgs and came down to 18.3 mkgs from last years level of 22.6 mkgs.

S Patra, joint secretary of Indian Tea Association, said production during October is likely to be down due to erratic weather conditions. Apart from that plucking has been less in October due to the festive season. All put together we are expecting a pipeline shortage of around 80 mkgs this year, said an industry expert.

According to CS Bedi, managing director of Rossell Tea, pipeline shortage could touch the 80-mkgs mark. Production in October was heavy last year. That wont be equalled this year. Moreover, we barely have 20-25 days of production left this year. During the first two flush north Indian crop suffered pest attacks this year which hit production hard and is still in a weak condition.

But such a shortage is likely to help tea prices in coming months. Tea prices have already firmed up by Rs 10 in the last four weeks. We expect the market to hold the price by end of the year, Bedi said. While average auction price for north India increased by Rs 4.29 per kg during January-September period this year, average south Indian tea prices were down by around Rs 15 per kg.