Tea production declines 13% in January-March on lack of rainfall

A prolonged dry spell has hit tea production in the country. While the volumes are likely to decrease in the northern tea-growing areas, the lack of rainfall has already hit the quality of the Darjeeling tea, the highest revenue earner for the industry.

According to the Tea Board of India estimates, production during the January-March quarter has fallen 13% to 82.29 million kg from 94.39 million kg in 2011. North India tea production during the period was down 17.6% to 37.52 million kg from 45.58 million kg in the corresponding period of the previous fiscal. Production in South India during the quarter was down 8.32% to 44.77 million kg from 48.84 million kg in 2011.

According to the Indian Tea Association estimates, the North Indian production during April was down by around 8 million kg, while that in the South India was down by 4 million kg.

?The world tea productionhas fallen by 40 million kg during the January-April period this year although we are yet to get the latest figures. Production in Kenya and Sri Lanka has also declined,? said S Patra, joint secretary of the Indian Tea Association. ?We have faced dry spells in May and that will pull down the production further,? Patra added.

According to Tea Board estimates, production in Darjeeling during the first three months of 2012 was down 30% to 4.1 lakh kg against 5.8 lakh kg last year.

The first flush of Drajeeling Tea is harvested in mid-March, following spring rains. ?Quality of the first flush declined due to lack of rainfall. We are expecting the quality to improve from the second flush,? said SH Bagaria, chairman of the Darjeeling Tea Association.

?In the international market we have witnessed good demand for the first flush this year but there is a price resistance in the European market and that is restricting a good price for the Darjeeling crop,? said Saurav Garg, director of Longview Tea & Agro. Longview has a garden in Darjeeling and two in Terai region.

India produced 988.3 million kg tea in 2011 against 966.4 million kg in 2010, a marginal increase of around 2%. North Indian production during 2011 was up 3.38% to 747.45 million kg in 2011 against 723 million kg in 2010. South Indian production was down 1% to 240.88 million kg in 2011 against 243.37 million kg in 2010.

Meanwhile, average auction prices for tea during the first three months were lower than last year’s level. In January 2012, average auction price was at R95.70 per kg against R93.70 in January 2011. In February, 2012 prices came down further to R88.48 per kg and R81.89 per kg in March this year against R88.36 per kg in February, 2011 and R82.39 per kg in March, 2011. Averge auction price for Indian tea during 2011 was R103.39 per kg, 1.26% down from 2010’s level of R104.65 per kg. Average auction price for Darjeeling tea was marginally up to R316.46 per kg in 2011.