Tea exports rebound on shortfall in Kenyan crop

Chennai, May 13 Tea exports rebounded in March by 20 per cent, on demand from Pakistan and Egypt, but production declined nearly 5 per cent, mainly on fall in harvest in North India.

According to Tea Board data, exports during March were 16.02 million kg (mkg) against 13.32 mkg during the same period a year ago.

“There has been quite a rebound in tea exports, especially from the South during March,” said plantation industry sources.

Exports from the South during March were up at 7.7 mkg, against 6.4 mkg the previous year.

For the first quarter of this year, exports are down marginally. During January-March tea shipments from the country were estimated at 43.25 mkg, against 44.37 mkg during the same period a year ago.

Of this, exports from the South were 19.23 mkg against 21.5 mkg.

Kenyan hit

“Exports picked up mainly on shortfall in the Kenyan crop. Estimates peg the global shortfall at 62 mkg and this is not a small quantity,” the sources said.

The Kenyan tea crop has been hit this year by adverse weather conditions and political unrest.

“The drop in Kenyan production has led to countries, such as Egypt and Pakistan, to turn towards India. South Indian tea, in particular, has gained from this,” the sources said.

Pakistan is the third largest market for tea consuming at nearly 140 mkg. Tea exports to the neighbouring country have been witnessing ups and downs during the last three years. While exports increased during 2006, again due to the Kenyan crop getting hit by drought, they declined last year as the crop in the African country bounced back.

Indian tea has been gaining some foothold in Egypt due to various promotional efforts undertaken by the Tea Board and the plantation industry. Similarly, Iran is also warming up to Indian tea.

Production

Upto February, tea production in Kenya was down to 53.8 mkg against 76.4 mkg in the same period last year.

In view of the fall in supply, tea prices have witnessed a rise at various auctions across the globe.

In Indian auctions, tea prices on an average improved to Rs 66.24 a kg during January-February from Rs 60.96 during the year-ago period.

Production, on the other hand, declined to 50.5 mkg during March against 53 mkg during the same period a year ago. For the January-March period, production has been estimated at 89.9 mkg against 89.3 mkg last year.

Among the various tea-growing States, production in Tamil Nadu increased 2.6 mkg in March alone to 13.3 mkg, while in Kerala it was up 1.4 mkg to 5.8 mkg.

In fact, a 7.1 mkg rise in production in the South has made up for the 6.5 mkg fall in the North.

While Tamil Nadu’s production increased 4.6 mkg to 32.9 mkg during the first quarter, Kerala’s output was up 2.5 mkg to 15.4 mkg.

“The rains in February and March have helped improve production. A rise in production coupled with better prices is helping the tea sector,” the sources said.

Analysts are of the view that India would be able to reap the real benefit of the fall in the Kenyan crop during the second quarter of the year.