ITA warns country of tea shortage in year 2006

Kolkata, Sept 3: Indian Tea Association (ITA) has warned the country would face tea shortage in year 2006, in a status report released recently.

Based on the domestic consumption, exports and carry-over stock positions, ITA has pegged the shortage at 27 million kg.

The ITA report says the country would produce 930 million kg and export 195 million kg in the current year. Which means the industry would miss the commerce ministry's export target of 200 million kg for 2006. ITA has pegged domestic consumption at 805 million kg based on a 3.3 per cent annual growth rate.

Accordingly, India would require 1,000 million kg of tea to meet its export obligation and domestic requirement. With production levels of 930 million kg and expected imports of 20 million kg, total availability of fresh tea in the country would be 950 million kg. The year started with carry-over stocks of 23 million kg. Taking into account the carry-over stock, ITA has pegged overall supply at 977 million kg. That means there will be a shortage of 27 million kg in 2006.

With a shortage of 27 million kg, the ITA is hopeful the industry would recover from the bad phase, which it had been experiencing over the past six years. But it is concerned about the lower output of orthodox tea which fetches better prices in India and overseas markets.

Recent price movements show Indian tea which earlier had to jostle with other countries is commanding better prices in world market as well as in domestic market. This has happened since there's a huge global shortage of tea this year. Against a world production of 794.4 million kg in the period January - June 2005, production this year fell to 739.4 million kg in the same period. If the crop scenario does not improve there would be further hardening of prices in the world market at the end of 2006 and India would be no exception.

On the export front, Year 2006 has started on a subdued note.

During January-to-June 2006 total tea exports was lower 1.5 million kg. Exporters, however, are optimistic and hope that this trend could be arrested as soon as the second flush crop becomes available. Amid this, pesticide issue has again come up in a big way from some countries like Japan causing concern for Indian exporters.

The association as well as the Tea Board has identified Pakistan, Iran and Egypt as the three major countries for exports of tea in the current year.

UNI