India’s tea production during 2018 is expected to stay more or less the same as it was in the year 2017 irrespective of less rainfall. It is predicted that the exports will significantly increase. India is positioned as second largest producer of tea in the world and contributes 26% to the global production of tea.
As per the traders report, Indian tea is expected to benefit from wage hike in Sri Lankan plantations and residue (pesticide) problems in Vietnam. Parimal Shah, vice-president, MK Jokai Agri Plantations, said tea production is estimated to be marginally lower at about 1,300 million kilogram (mkg), against 1,322 mkg in 2017.
He also added,“Despite lower rainfall, when compared to 2017, production is seen commendable with December output estimated at 55 mkg. Assam production is likely to end up marginally higher at 614 mkg, against 600 mkg last year.”
Mr Shah said about the price, that it has been a modest year. “Movement of tea was bit erratic due to the sanction problems in Iran and the prices were low. But, once it becomes clear that India could export to Iran, tea prices have picked up sharply. Wage hike across plantations is a big concern for the organised sector.” He added the share of wages come to 60-65% of the total production cost for organised players for tea plantations.
Sriram Narayanaswamy, president, Global Tea Brokers said that the expected wage hike in Sri Lankan plantations is estimated to help South Indian orthodox production. He also added,“We have seen good demand for South Indian orthodox tea with problems seen in Vietnam and Indonesia. An increase in Sri Lankan tea production cost could help South Indian tea, and more producers are seen moving to orthodox from CTC (crush, tear, curl).”
Sriram added that it is observed that the export of CTC tea to Egypt and Pakistan is also higher for this year.