It's rare that news of sliding production levels signal clinking of champagne glasses. Precisely, this is what seems to be happening among the tea producing fraternity.

Battered by persistently dwindling prices virtually throughout the year, tea companies, or many of them, were readying themselves for blood-splattered balance sheets at the end of financial year. While some may not be able to avoid the bloodbath yet others may just about pull through. And the reason is a drop in production during November.

The November crop in north India is said to be down by about 10 percent. Some of the bigger companies have experienced crop shortfall of over 11.5 percent as well. But that seems to be good news. Because tea prices have shown improvement over the past couple of auction sales.

The crop shortfall in India may eventually bring down the estimated tea production this year to around 835 million Kgs., about five million less estimated at the beginning of the year.

Besides India, other producers like Sri Lanka and Kenya have also lost crop by about six million Kgs. and 3 million Kgs., respectively. Considering the fact that the global crop is still higher than last year's. India's 30 million Kg-plus will eventually end the year at about a 50-million Kg. surplus for world tea production. But this is still about 80 million Kgs. lower than the 1998 production.

While shortfall would get expanded by that margin, the other happy news flowing in is the possibility of higher exports this year. "We are expecting exports to touch 215-220 million Kgs.," said Gautam Bhalla of Warren Tea, who recently led a high-level delegation of tea producers and exports to Dubai, Saudi Arabia and Cairo.

Mr. Bhalla's prediction is based on the improved Orthodox tea production for the year, all of which generally find export markets.
(05/12/2000)

Back