Financial Daily from THE HINDU group of publications
Tuesday, Jun 01, 2004
Agri-Biz & Commodities
Southern tea output seen down for fourth successive year
Mumbai , May 31
SOUTH India tea production for the period January-April 2004 is likely to be lower by 12.43 mkg in comparison with the corresponding period last year.
Industry sources said for the period January-March 2004, South India tea production had seen a 17.75 per cent drop or is down by 7.64 mkg at 35.43 mkg as against 43.078 mkg during the corresponding period last year last year. The April crop, one among the peak crop production months, is reportedly down by 4.8 mkg at 14.7 mkg as against 19.5 mkg last year.
This would mean that South Indian tea production would be lower for the fourth consecutive year with total production estimated at a little more than 180 mkg in 2004.
While a drought-like condition early this year and lack of pre-summer showers impacted tea production during January-March, continuous rainfall hampered prospects of the crop in April.
When contacted Dr N. Muraleedharan, Director, UPASI Tea Research Foundation, said low periods of sunshine and continuous rainfall did not allow the tea crop to `flush'.
``Ideally, an April rainfall and high sunshine in May would have resulted in a good crop. However, that was not the case. In fact, instead of going in for zinc sulphate i.e. a micro nutrient application when the bushes are in full bloom, we had to go in for fungicide.
``This was because we started witnessing instances of blister blight disease, which is ordinarily seen in June. We've also had instances of red spider mite disease cropping up in many places,'' he told Business Line.
Industry sources maintain that North India was also likely to see at least a 20 per cent drop in tea production.
While a shortfall in production is expected to augur well for tea prices, the tea trade is sceptical over the duration of the trend.
``There is no denying that tea prices are looking up but that is primarily for the high-end teas. Medium teas are dearer only by Re 1 to Rs 2.
However, going forward we expect quality to suffer,'' trade sources said. The monsoon-like conditions have reportedly impacted leaf to an extent that it may hamper processing, thereby affecting the liquor content.
Reiterating this, leading exporters said while chances of a sharp surge in prices was unlikely, one factor that could prop up the market would be if more Iraq buying were to come in.
Commenting on the current upside in prices, trade sources said sustained upcountry buying had aided in the price surge. ``Assam teas are ruling firm which in turn is reflected in tea prices in the South,'' an auctioneer said.
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