2011 Indian Tea Deficit to Be 100 Million Kg This Year
All Indian tea producers including Darjeeling tea estates are expecting a production deficit by as much as 100 million kg this year. This is despite the fact that the weather condition and climate is generally good this year. This trend is expected to increase the price of Darjeeling teas produced all over the tea garden estates in India.
Last year's production of 966 million kg is expected to yield at least 990 million kg this year to accommodate the consumption increase of about 30 million kg each year. However, the Tea Board is not so hopeful that this target can be reached this year.
The world's largest tea producer in India, McLeod Russel, through its managing director, Aditya Khaitan said in an official statement, "The year started with a shortfall of 100 million kg. I don't think the production increase will mitigate the deficit. It will be enough to absorb the consumption increase. But this year looks much stronger than the previous year when we lost crop during the quality period."
The Darjeeling tea estates in India are also suffering from massive losses, not only because of the production issues, but more so because of the government disputes with some groups. This has been raising concerns from the Darjeeling tea owners and they are hoping it will be resolved very soon.
Due to the recent developments, tea prices are expected to go up by Rs 15-20 a kg. In fact, the Bombay Stock Market reflected a sky high price of Rs 287.90, a 52-week high recently. Another producer, Jayshree Tea and Industries also gathered a record high of Rs 181.90, which is very close to its 52-week high of Rs 210 per share. If tea producers are seeing this as a bad business sign, tea drinkers are skeptical about the pricing.
Overall the global tea industry including Darjeeling and Assam teas expect that the annual shortage will fall around 55 million kg. This trend is expected to occur in spite of the good production in the month of May this year. According to the Indian Tea Association, production reached 243 kg, which was 8 million higher than last year. And most of the teas were from Assam and North Bengal. May production saw quite a relief for tea producers even in Darjeeling and Assam tea estates; especially that April did not make very good production, which was down by 5 million kg compared to last year.
The Indian Tea Association is expected to release the latest figures after the Monsoon. But with the current figures recorded until May of this year, it is expected that production will be down by as much as 155 million kg.