Bad news: Tea prices may RISE

Kolkata, Nov 29: After a stagnant phase lasting months, tea prices have started firming up and are likely to rise further on the back of declining production for a variety of reasons, experts say.

As per Tea Board India data, production in North India in September declined by 42 million kg. Apart from Assam, tea production in the Dooars and Terai regions of West Bengal also went down by around nine million kg "owing to climatic adversities".

"September tea production was down substantially in North India owing to climatic adversities. There were some marginal gains in October. However, there was a drop in production taking September, October and November collectively. Thus, the prices should be Rs 10-15 a kg higher," Indian Tea Association Chairman Azam Monem told IANS.

In 2016, India produced 1,267.36 million kg of tea, with North India -- which includes Assam and West Bengal -- accounting for 1,054.51 million kg.

The decline is even more prominent in Assam where production declined by around 31 million kg in September due to excessive rains. The overall crop in Assam fell by around 23 million kg in the January-September period of this year.

"The months of September and October contribute about 25 to 30 per cent of annual production in Assam. The September production was down by over 25 per cent compared to the corresponding month last year and October production this year was at par with the year-ago month," North Eastern Tea Association's Advisor and former Vice Chairman of Tea Board India Bidyananda Barkakoty told IANS.

"It is expected that the annual production shortage this year in Assam is likely to be around five per cent of last year's production. In view of this, the prices are expected to firm up in the coming months," he added.

Assam, which accounts for 50 per cent of India's total production annually, had produced about 669 million kg in 2016.