Tea exports have downgraded by 20 per cent in the first six months of the present financial year owing to decreased availability and high prices.
Tea Board of India suggests export in the first half provisionally estimated at 81.85 million kg as compared to 102.6 mn kg in the same period last year. The realization was higher, resulting in export value falling marginally to Rs 1,508 crore in the first half, compared to Rs 1,560 crore in the same period last year. The export unit price worked out to Rs 184.2 a kg during H1, substantially higher than the Rs 1,524 a kg in the first half of last year. India is the fourth largest exporter tea provides a large number of Indian tea exporters of the brew globally, after Kenya, China and Sri Lanka.
Tea production of India rose marginally to 690.3 mn kg in the first half ending September this year, from 688 mn kg in the same period last year. But production for the entire year is set to remain lower by an estimated 25 mn kg this year, due to erratic weather in the major producing states, analysts say.
Crop shortages traditionally impact prices towards the end of the calendar year. Hence, tea prices are likely to go up due to a shortage of crops both here and abroad. During the September quarter, the erratic monsoon behavior caused a lot of crop damage. According to the industry experts the global shortfall this year is estimated at 43 kg as compared to last year, due to lower production estimates from Kenya, Sri Lanka and India.
An Icra Management Consulting Services Ltd ( IMaCS ) report forecast India’s tea exports to fall to 180 million kg for 2012 from 193 million kg in the previous year, due to high prices. The benchmark price of the CTC variety has gone up to Rs 149 a kg from Rs 124.50 a kg, year on year. Dust tea prices have risen to Rs 152.6 a kg from Rs 123.6 a kg in the corresponding period of the previous year. These prices are set to upgrade further.
Per capita consumption of tea in India was 711 grammes in 2011, considerably lower than other tea drinking nations such as Ireland with three kg and more than two kg each in Britain, Turkey and Iraq, and more than a kg in Sri Lanka and Pakistan.
Domestic coffee consumption has been continuously growing, at an annual average rate of six per cent, largely due to a thriving upscale café culture. Coffee outlets, which have a lot of appeal for the new generation, are set to increase multi-fold in the next three years. The entry of global players such Starbucks and Dunkin’ Donuts in India would herald a strong growth trend. India exports a little over two-thirds of its coffee output, growing it primarily in the southern part.