Global tea prices to remain depressed

New Delhi, July 24 (UNI) Global tea prices are likely to remain depressed due to increasing imbalance between supply and demand, which is currently at 0.1 million tonne, according to an industry report.

Tea production increased in India by 3.9 per cent in 2005 to 0.93 million tonnes driven by robust output in Assam. However, declines were reported from West Bengal, while a modest increase in output was reported from South India.

The output has grown at a slower rate over the last few years, because of the closure of upto 70 tea gardens in Assam due to the widespread recession in the industry, report said.

The Indian tea industry, after having faced the vagaries of weather, is on the path to recovery but only in terms of production.

Black tea dominates consumption, with an estimated 80 per cent of production, report highlighted.

The report shows that the consumption of tea increased by 2.9 per cent during 2005.

As per the report, world tea production increased by 2 per cent in 2004 to 3.2 million tonnes with the expansion recorded in Turkey, China, Malawi, Sri Lanka and Indonesia.

The growth in output from these countries more than offset declines in other major producing countries including India and Bangladesh.

In addition, world tea exports increased by 4.4 per cent in 2004 to 1.47 million tonnes and net imports by 1.5 per cent to 1.42 million tonnes. Most of the growth in the markets is in response to the promotional efforts on the health benefits of tea consumption.

The report also shows that the recent developments in the world market have made the major players to adapt well to the uncertainity in prices in the short-term.

In India, domestic players have to ensure that the quality of tea is upgraded keeping cost of production under check. While that need to become globally competitive for exports, innovative strategies need to be adopted to increase domestic consumption, report said.

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