Drinking tea seems to be fashionable again in India as domestic consumption props the market even as exports record a fall. Auction prices across the nation have shown an increasing trend as domestic demand absorbs increasing quantities, traders said.
Indian exports had fallen by nearly 62 million kg to 157 million kg in 2007. ?The fall in export did not dent the domestic auction prices because of the internal absorption. Domestic consumption is reported to be growing around 3% on a larger base,? Paulose Joseph of Forbes Ewarts and Figgis said.
India is mainly CTC consuming nation compared to other nations, which prefer the orthodox variety.
CTC production has been on the increase with production in South India increasing handsomely during January and February of 2008, traders said. ?But the auction prices for the first ten auctions of the new calendar year has increased marginally by Rs 2 when compared to the first ten auctions of the last calendar year,? Paulose Joseph said.
Even though there is no reliable studies and reports on the domestic consumption of tea, experts put the figure around 2.5%-3% per annum. Reports suggest that India consumes about 23% of total tea production in the world, and over 75-80% of its own production.
Total tea consumption in India in 2000 was estimated at over 650 million kg, of which the share of packaged tea stood between 30% and 40%. It is said to have risen to around 800 million kg by 2007.
However, some reports also suggest that tea is seen losing market share to soft drinks, as people tend to consume less of the beverage when outside their home.