India’s tea production in 2022 will be roughly the same as in 2021, according to trade sources. Compared to the output of 1,343 million kg last year, the production this year will be around 1,340-1,345 million kgs, they said.
“Despite the fluctuations during the year, the production till November is almost the same as last year. During December, the output will not be much, because of the cuts as per the Tea Board’s directive, but such reduction in the final months occurred in the past four years as well ,” Indian Tea Association (ITA) secretary Sujit Patra told FE.
Tea production in November rose 9.83% year-on-year to 132.73 million kgs from 120.85 million kgs a year ago, according to data released by Tea Board India.
For November, production for both North and south India increased. For north India, the production soared 7.13% y-o-y to 111.56 million kgs, while for South, it grew by 26.61% y-o-y at 21.17 million kgs.
Interestingly, this year, the industry has produced more orthodox tea compared to last year. Till November this year, orthodox tea output stood at 142 million kgs against 130 million kgs during the same period last year. Last year, India produced around 135 million kgs of orthodox tea.
“Higher orthodox tea production has given us more exportable varieties. It has already helped us in export markets,” Patra pointed out.
The country exported 185 million kgs of tea till October this year against 160 million kgs of the brew a year ago. The industry expects to export around 222-225 million kgs of the brew this year. In 2021, export stood at 196 million kgs.
“Three consecutive years (2020 to 2022) of sub-normal production is expected to result in a significant tightness in pipeline stock, thus providing some support to prices going into the new season. Tea prices in the first half of CY2023 are also likely to remain firm. However, full-year FY2024 performance of bulk tea players will remain dependent on the production and export levels during the 2nd half of CY2023,” Sujoy Saha, Vice President & Sector Head – Corporate Ratings, ICRA Limited, said in a note.
“Buoyant tea prices, particularly of good quality CTC (crush-tear-curl) and ODX (orthodox), would lead to an improvement in the margin of North India (NI) based bulk tea players in FY2023, despite the wage increase in CY2022,” Saha added.