The Hindu : Business : Tea industry expects to bounce back

Online edition of India's National Newspaper
Friday, Nov 19, 2004

Business

Business

Tea industry expects to bounce back

By Our Special Correspondent

KOLKATA, NOV. 18. The Indian tea industry is hopeful of closing 2004 with better prices, higher exports and lower output indicating an equilibrium between demand and supply.

According to a Status Paper prepared for 2004 by the Indian Tea Association, "if the current trend continues, the industry should perform well and resume its growth momentum after half a decade of recession".

The status paper, which is a critical appraisal of the industry, is being brought out for 16 years now and forms the basis of policy-making for the Indian tea industry. However, the report which was released today, warned that the Indian tea industry's survival hinged on cost reduction and it was essential to benchmark costs against Kenya and Sri Lanka or in India.

Marking out exports, domestic consumption and increased production of orthodox tea as three areas that should get maximum thrust, the study projected a production of 830 million kg (previous year 857 million kg), exports of 190 million kg (173 million kg) with domestic consumption touching 710 million kg (697 million kg).

North India, which accounts for about 75 per cent of the industry output, is expected to produce 645 million kg (663 million kg) with the three southern states contributing the remaining 185 million kg (194 million kg).

The study revealed that tea imports were heading northwards. Between January and July 2004, total imports stood at 15 million kg against less than 5 million kg in the same period in 2003. Tea is imported mainly by the merchant exporters for re-exports and remains a contentious issue with many tea corporates in the organised sector.

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