For the first time in the country, average tea prices rose by 40-60 per cent in the auctions driven by strong buyers’ demand and a severe shortfall, reports Business Standard.
According to Tea Board data, in the first auction held in the month of May, prices surged by over 52 per cent at Rs 217.12 per kg at the Guwahati auctions where Assam tea is primarily sold. And in a similar auction in Siliguri, prices surged by around 39 per cent at Rs 204.25 a kilo. By the mid of May, prices in Guwahati rose by 61 per cent at Rs 217.12 while Siliguri maintained the 39 per cent surge.
Industry officials have been insisting that there is practically no tea with the buyers as the lockdown, which hit tea production direly, took place just at a time when fresh teas of the season had just started to pour in. Given the scarcity and the demand from the buyers, price momentum is likely to be sustained.
According to the Indian Tea Association, the country has already registered a 120-140 million kg (mkg) shortfall in the production, which is likely to spill over to the next year. Under the existing and expected weather conditions and the modus operandi in the tea estates, production is expected to be at normal levels and over-production, which can make up for the lost crop, is being ruled out.
Goodricke group has already lost 1.65 million kg of crop, or eight per cent of total annual production, resulting in a Rs 54.4 crore impact due to lower output. Warren Tea has registered an estimated crop loss of 1.35 million kg, or approximately 18 per cent of the expected annual production.
Around 50 per cent of the crop during March-April has been lost already.