Tea, as a commodity, has had a relatively good time in 2009 with growth in demand, despite the economic slowdown.
As erratic climate affected production in all tea producing nations, the market remained firm and gained by 20-30% during the year in all major auctions.
Auction prices in India have increased continuously for the past two years despite a drop in exports during the first 10 months of 2009. Traders believe that high domestic prices prevented more exports from India.
According to figures provided by the Tea Board, new bench mark levels were established at the Indian auction centres during 2008 with the all-India auction average gaining Rs 19.58 per kg over the previous season to finish at Rs 86.99 per kg.
The latest trends on domestic prices indicate that price increase was not only sustained but reached newer heights in 2009.
The all-India auction average price (for all teas) reached Rs 112 .18 in November as against Rs 86.46 per kg in January. Price of branded tea has also gone up in the last one year.
Erratic weather pattern in most of the tea producing regions in the world and the consequent shortfall in supply ensured significant gains in price during 2009.
In India , drought-like conditions in the Dooars and major portion of Terai saw production in North India fall significantly in the early part of the year.
In South India , frost during December and January and then the continuous drought in the following months saw production decline.
However, production was up in September and October and the cumulative shortfall finally was restricted to just 2 million kg as against last year.
According to the latest figures provided by the Tea Board, production during January-October of 2009 stands at 830 million kg as against 832 million kg during the same period of 2008.
Production in South Indian dropped 4 million kg for the 10 months that ended in October while output in North India gained by 2 million kg during the same period.
Though production in CTC producing nations like Kenya and Sri Lanka was not up to the mark, exports dropped to stand at exports stood at 149 million kg during January-October as against 171 million kg during the year-ago period.
Export realisation saw quantum jump with a kilogram of tea exported during 2009 fetching Rs 136 when compared to Rs 89 during the same period of 2008.
Traders don?t see exports improving in the last part of the fiscal due to the appreciation of rupee and high domestic prices.
Exports touched 196 million kg during 2008 as compared to 179 million kg of 2007.India produced 981 million kg of tea in 2008 when compared to 945 million kg in 2007.