Dec tea production falls marginally

Kochi, Feb. 8

Indian tea production has fallen in December mainly on account of production shortfall from tea plantations in Tamil Nadu.

Tea production for the year 2009 has also dipped, due to lower production reported from plantations in various States in the South. Unusual weather conditions, drought-like conditions followed by incessant rains were the prime causes for the production shortfall.

“Although we expected greater impact from the extensive flooding in the Nilgiris in the latter part of the year, the moisture stress and drought-like conditions prevalent in the earlier part of the year in South India took a more severe toll on production”, sources in the United Planters Association of Southern India (UPASI) said.

Although North Indian tea plantations reported higher production in December, the all-India production fell a tad lower at 58.105 million tonnes (58.613 million tonnes) in December. Production trends for the year, as a whole, were also on similar lines with North Indian plantations reporting a higher production even as pan- Indian production slipped marginally to 978.99 million kg (980.81 million kg).

Surplus

Surplus production from plantations in Cachar and Assam valley drove up North Indian production, even as production shortfalls were reported from the tea estates of West Bengal. In fact, biggest production shortfalls were reported from West Bengal during 2009 which was more than made up by surplus production from Assam. The country reported a nominal fall of 1.81 million kg during the calendar year 2009.

Export volumes

However, Indian tea exports forged ahead, backed by good volumes and a spike in unit value realisation. Export volumes rose to 22.23 million kg (16.26 million kg) in December while the unit value realisation rose to Rs 137. 40 / kg (Rs 131.94 / kg). Although export volumes registered a fall for the year as a whole, it was compensated by a smart rally in unit value realisation. Export volumes fell to 191.49 million kg (203.11 million kg) even as unit value realisation spurted to Rs 136.64 / kg (Rs 117.81 kg). As a result, Indian tea export realisation grew to Rs 2,616 crore (Rs 2,392 crore).

Some amount of fluctuations was evident in domestic tea prices in recent months, but the prices have remained buoyant and firm for the year as a whole, sources in UPASI said. Given the shortfall in production, firm trends are likely to be sustained in both the domestic and international markets. While lower production from Sri Lanka and Kenya is the prime reason for the global shortfall, India has also made a small contribution to the global deficit with the country's production falling short by less than two million kg in 2009.

Source:http://www.thehindubusinessline.com