TEA companies are breathing again. Price realisation levels showing improved trends at auctions for the first time since the past eight or nine months, biggies like Williamson Magor, Duncan Industries, Warren Tea, Assam Company, Assam Frontier, Dhunseri Tea and others are hoping to bounce back during the year 2000-2001.

"The price trends are heartening," according to P K Bose managing director, Warren. "But then, there are no teas," he said.

Duncan Industries, which has progressively gone back to 'auction type' teas, has also witnessed better price trends in the last couple of months. "Our teas are beginning to create their own brand equity and getting accepted by buyers looking for quality teas," Bhaskar Banerjee, DIL senior managing director said.

Chandra K Dhanuka of Dhunseri Tea and Industries was also upbeat about the current rising tea price trends, but admitted that lack of teas in the marketplace was the chief reason for the improved situation. "But whatever be the reason, it shows that the tea demand has not fallen drastically as was being feared in several quarters," he said.

Even as the price trends during the just ended December 2000 are being compiled by the producers’ associations, indications are that the average may well be close to Rs 95 per kg.

This is significant considering the fact that the two immediately preceding years of 1998 and 1999 have seen sharp declines to Rs 80 per kg and Rs 72 per kg, respectively. The average tea price in 1997 was Rs 97 per kg.

While there is some relief among producers, the fact that the cost of production has gone up by at least Rs 20 a kg since 1997, is a cause for concern.

While the genesis of this turnaround may be attributed to the decision among the ‘teawallas’ to completely stop production from the second week of December, last year, the fact remains that there were no tea leaves to be plucked by then.

According to some in the industry, there are gardens in Assam which had to be shut down much before the December 12 deadline given to tea producers. "In fact some of the gardens had to go off production from November 30 itself since there was no flush," Bose said.

Drop in overall crop on account of weather conditions, higher concentration on quality and large volume of orthodox tea production has now compelled the industry to re-estimate production figures of the year 2000 at 825 million kgs.

With exports hoped to cross the 200 million-mark again, tea companies can expect prices top flare up some in the next few weeks setting the tone for an encouraging first flush season. (06/01/2001) (06/01/2001)

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