India Commodity Tea production Drop 15mkg

Production of commodity tea in India is likely to come down to 965 million kg during the year, a drop of almost 15 million kg from last year?s level of 980 million kg, according to the Indian Tea Association. The industry is facing one of the worst years in terms of productivity due to adverse weather conditions and pest attacks in 2010. Despite some recovery in certain areas in Assam, the industry is worried with the slow pace of recovery.

North Indian tea production this year started coming down from early this year due to heavy rainfall and attack from pests like helopeltis. Production went down by 13 million kg in Assam during June and million kg in West Bengal?resulting in an overall decline of over 15 million kg in North India.

North Indian production of tea commodity, on the other hand, is likely to dip by almost 25 million kg to 710 million kg from last year?s 735 million kg. ?During August North Indian crop is down by 8 million kg over last year and it is expected that the September crop will be lower by another 8 million kg,? Aditya Khaitan, chairman of ITA, said.

Meanwhile, according to Khaitan, tea prices will start moving upwards only from October. During the January-July, 2009 average auction price of Indian tea came down by Rs 4.66 per kg to Rs 93.98 per kg from Rs 98.64 per kg for the corresponding period last year. ??Prices in the domestic market reacts with a lag effect which is about 3 months. While tea season starts in April, bulk purchasers like Hindustan Unilever and Tata Tea only move in around July after the initial premium quality tea gets exported,?? Khaitan added. The crop situation particularly in Upper Assam, concentrated mainly in the Doom Dooma area, has been severely affected with nearly all the major tea groups operating in that region reporting significantly lower production.