Tea output in India's top-producing Assam state is likely to fall by 10 percent in 2014 due to scanty rainfall and a sharp rise in temperatures, hitting exports of premium grade leaf from the world's biggest black tea producer, industry officials said.
A drop in India's production and exports could push up global prices and boost shipments from competing countries like Kenya, Sri Lanka and Vietnam.
India's north-eastern Assam state produced 618 million kg tea in 2013, more-than half of the country's total production of 1,200 million kg.
"We have lost production since the start of the year due to extreme dry weather. There could be a 10 percent drop in production this year," Rajib Barooah, chairman of Assam Tea Planters' Association, told Reuters.
"Higher temperatures are hitting the growth of tea bushes. There is a concern of pest infestation due to erratic weather."
In Assam and West Bengal, the country's second-biggest tea producer, temperatures were hovering 2 to 5 degrees Celsius above normal, the weather department said on Tuesday.
"Tea plantations badly need rainfall. Further dryness will increase crop damage," said Sujit Patra, joint secretary at the Indian Tea Association.
Tea production in West Bengal, centred on Darjeeeling tea gardens known for their superior quality, could drop if adverse weather conditions prevail for next few weeks, Patra said.
From March 1 to April 23, Assam received 69 percent less rainfall than normal, while rainfall in West Bengal was 63 percent below average. The two states accounted for nearly 80 percent of the tea production last year.
Rainfall in March and April determines production in May and June, when Indian tea gardens produce their premier second flush crop.
"Quality-wise second flush is the best and most sought by exporters. If its production and quality goes down, then obviously it will have a negative impact on exports," Barooah said.
India's tea exports rose 2 percent to 212 million kg in 2013 due to higher purchases from Iran.
India exports CTC (crush-tear-curl) tea mainly to Egypt, Pakistan and the UK, and orthodox variety to Iraq, Iran and Russia.
"Early onset of the monsoon and average rainfall could limit the crop damage. But if the monsoon remains patchy as forecast by weather department, then production would suffer in the second half of the year," said a researcher at Tea Research Association.
India usually produces the bulk of its tea in the second half of the year. The country is likely to receive below-average rainfall in 2014, the government's weather office said on Thursday, citing a risk to the June-September monsoon rain season from the El Nino weather pattern.
Adverse weather could trim tea output at the world's biggest tea producer McLeod Russel and Jay Shree Tea and Industries as they have plantations in Assam and West Bengal. But the impact on earnings would be limited due to a likely rise in tea prices.
"On auction platforms we are getting lower supplies than last year and this is being reflected in tea prices," Kalyan Sundaram, secretary of Calcutta Tea Traders Association, said.
Source:- in.reuters.com
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