Paban Singh Ghatowar (left), minister of state for development of Northeast, and M.G.V.K. Bhanu in Calcutta on Friday. Picture by Kishor Roy Chowdhury
Calcutta, Sept. 21: Domestic tea is expected to fetch a better price this financial year because of the growing preference for high-quality brew.
The production of the overall crop is also higher by 25 million kg till August compared with the same period last year, Tea Board chairman M.G.V.K. Bhanu said on Friday.
“In the current financial year, I see tea prices to be slightly higher than the previous year, though not exorbitantly high. The price of exportable tea has increased 25 per cent. Orthodox tea prices will firm up. It is the high-quality tea that is going to cost more,” Bhanu said on the sidelines of the 44th annual general meeting of the Tea Association of India.
Between January and July this year, about 259.8 million kg was offered in the auctions in south and north India that was sold at Rs 128.86 a kg.
During the corresponding period in 2012, 252.6 million kg was offered, fetching Rs 113.82 a kg.
Domestic production stood at 1,126 million kg in 2012, of which about 100 million kg was orthodox.
Bhanu said there was no concern about production growth. While domestic consumption was increasing at a steady pace of 30 million kg a year, production was also growing in tandem.
According to Hemant Bangur, president of the Tea Association of India, the first half of this year saw tea prices firming up across almost all the auction centres of the world.
“In Mombasa, there was some softening but that too was probably because of higher availability owing to a record crop output in Kenya. In India, better tea is able to fetch respectable prices. Although it is too premature to make a judgement, a shift in the Indian consumers’ taste is clearly visible. Selling prices of tea should be viewed and judged in the background of the cost incurred in its production. Movement of prices widely vary across regions,” he said.
The market has seen some planters make a gradual shift towards orthodox production from crush, tear, curl (CTC) owing to the higher prices fetched by the former.
Arun N. Singh, chairman of the Indian Tea Association, said the year had so far seen CTC prices down by Rs 6-7 a kilogram while the orthodox variety was up Rs 25. An additional 20 million kg of orthodox tea has been produced so far.