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India pest attack seen hitting tea exports

By: | at 08:00 PM | Channel(s): International Trade  

Tea output in India, the world’s second biggest producer, is likely to fall in 2010/11 on adverse weather and a pest attack in the biggest growing area, which will hurt quality exports, a senior official said.

“Excessive rains and a pest attack has hit tea gardens in Assam. In months of June-July, tea production is estimated to be lower than last year,” Basudeb Banerjee, chairman of Tea Board told Reuters in an interview on Wednesday.

India’s northeast state of Assam is the biggest producer in the country.

“In current financial year, our production would be lower than last year, but quantifying that at this moment is difficult. It depends on weather, no one can predict weather,” he said.

India had harvested 991.18 million kg in 2009/10.

“Heavy rainfall has stopped in Assam, but production will not recover immediately. It will take one more month for the situation to normalise,” Banerjee said.

In first two months of 2010/11 the country produced 140 million kg, a marginal rise of 5.2 percent compared to 133 million kg produced during the same period a year ago.

Banerjee said a pest attack of helopeltis affected tea gardens this year, and though it could have been controlled with pesticides, especially in the early stage, stringent EU quality requirements meant pesticides could not be used.

Exports Glitch
“Overall exports target of 205 million kg for current financial year is likely to be met. Quality tea exports will be down and that’s why, in revenue terms, exports may fall this year,” he said.

India exports CTC (crush-tear-curl) variety of tea mainly to Egypt, Pakistan and the UK and the premium orthodox variety of tea to Iraq, Iran and Russia.

Assam tea gardens produce premium, high quality teas like orthodox, which are in great demand and fetch better prices. These teas mature in the May-July, when the pest attack happened, affecting leaf quality, he said.

However, though exports would be affected, domestic tea prices are firming up due to the pest attack and likely to remain on the higher side this year, he said.

India shipped 23.9 million kg in April and May, 13.3 percent higher on year. Global supplies are improving due to higher production in other producing countries like Sri Lanka and Kenya, Banerjee said.

Aditya Khaitan, managing director, McLeod Russel , India’s largest tea producer and exporter, told Reuters last month that the prices are likely to go up on thin supply.

Jay Shree Tea & Industries and Harrisons Malayalam are other major tea producers.

The higher prices may hurt Tata Tea Ltd , one of the country’s biggest buyers, with global brands such as Tetley and Good Earth. (Reuters)