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South Indian tea crop could decline for 5th consecutive year

Tea Crop

South Indian tea crop reduction in the first eight months of 2013 is up to 10 million kg

Tea CropCoimbatore: The South Indian tea production is likely to witness a declining trend for the 5th year in succession, United Planters Association of South India President Peter Mathias said today.

South India reported a lower crop of 5.7 million kg during Jan-July 2013 period.

Mathias said, “Initial estimates suggest the crop is going to be lower by 25 per cent in August. This would mean that South Indian crop will be declining for the 5th year in succession,” he said in a press release.

“The cumulative decline in South Indian crop in the first eight months of 2013 is estimated at 10 million kg, which is unlikely to recoup in the remaining four months,” he added.

Attributing the main reason for the lower crop to the climatic conditions, Mathias said that initially the crop was lower on account of drought like situation during the first quarter. This was followed by excessive rain and overcast conditions, which were not conducive for the crop in the second and third quarters.

The prices, however, were buoyant as a result of lower crop level, coupled with higher domestic intake, which was evident from the higher volume of tea routed through auctions, he said.

Mathias attributed this declining trend to change in the product mix in favor of CTC tea to satisfy the increased domestic demand requirement. Last year, South India produced a little less than 200 million kg of the crop.

The average price realization in South was quite buoyant and is estimated at Rs 102.23 per kg in the Jan-Aug period as compared to Rs 84.24 per kg in the year ago period. CTC price was higher by Rs 17.99 while that of Orthodox tea by 19.10 per kg.

Going by market fundamentals, tea price should be moderately bullish in the coming festive season, Mathias added.


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