Tea producing companies in the country are expecting a favourable tea prices at auctions this year when the first flush of tea starts to arrive at tea auction centres early March.
The high hope stems from the estimated 50 million kg (mkg) shortfall in tea production. According to the Indian Tea Association (ITA), the apex body for north Indian tea planters, production was down by 13 mkg during January-October last year.
It is expected that the month of November-December will also register another 12 mkg dip in production owing to climatic changes in the tea-rich zones of Assam and northern West Bengal.
Coupled with this, the Tea Board’s crackdown on ‘bad tea’ (by not allowing plucking tea during winter) is also expected to result in another shortfall of 25-30 mkg.
“These factors together will lead to an expected shortfall of 50-60 mkg when auction resumes,” Vivek Goenka, chairman at the ITA, was quoted in a Business Standard report
The report quoting sources among the team brokers said that the tea consumption this year was also expected to improve primarily led by long chilly winters, the General Election and the Ardh Kumbh Mela.
The auction houses expect tea prices to improve driven by higher consumption demand and lower availability of tea during the opening season in March this year.
After close consultation with the industry, the Tea Board has mandated annual closure of gardens in Assam-Bengal-Cachar region so that no tea can be produced during the winter season.
The Board has also made it mandatory for the small growers to stop plucking leaves from the tea bushes during the winters. No estate factory or bought leaf factory can make any form of tea during the winter period.
“This is not only going to improve the quality of tea when plucking resumes but will also help flush out bad tea from the market”, Atul Asthana, managing director and CEO at the Camellia Plc owned Goodricke Group told Business Standard.