Liberal imports of tea leads to global output fall

Globalisation is surely taking its toll on the tea industry. With the Indian government adopting a more liberal stance towards imports into the country, the domestic tea producers are at a loss to deal with the continuing situation of depressed prices.

For most part of ’99, the tea producers witnessed substantial declines in prices despite the fact that overall production globally was down. India lost about 70 million kg, which is practically half of total crop loss experienced the world over. But that did not help prices. Besides, India’s exports dropped with markets like UAE and Russia not warming up sufficiently towards teas from India. But the big blow has come from imports. While clear import figures are still not available, these are round about of 20-25 million kg. It is a well known fact that the Indian government opened up imports from SAARC countries and put tea in the OGL list (open general license). This created a flutter among domestic tea plants, so much so that sentiments turned unfavorable in the local markets. Tea prices began to fall sharply at auctions. Buyers, especially the big ones, tended to defer purchases lending to an overall bearish trend in tea prices. Hardest hit are the south Indian tea producers and large sections of small tea growers in north India. While south India averaged somewhere between Rs 40-45 a kilogram, the north India average was only marginally better. Of course, some of the better varieties were able to attract satisfactory prices, though overall prices continued to be depressed. The current year is witnessing similar trends with south Indian teas hitting rock bottom prices


Market Update
(Others)