In India tea is like a staple beverage which acts as an energy booster and is simply indispensable. India happens to be one of the largest consumers of tea in the world. Teas can generally be divided into categories based on how they are processed. There are at least six different types of tea viz, Black tea, Green tea, White tea, Herbal tea, Oloong tea, Yellow tea. India happens to be world’s largest black tea producer after Kenya and Sri Lanka. India’s 79.9% of total black tea output comes from North India, while South India accounts for balance.
There are mainly two ways of producing tea in India namely the CTC production and Orthodox production. CTC is an acronym for crush, tear and curl. The tea produced by this method is mostly used in tea bags. The orthodox production method consists of five stages, namely withering, rolling, fermentation, drying and finally storing. It is not possible to compare the two varieties because their quality depends on factors such as rainfall, soil, wind and the method of plucking of tea leaves and both possess a unique charm of their own.
Tea Production:
For the on-going financial year 2015-16, tea production has shown an increasing trend except for the month of August due to adverse weather conditions resulting in droughty and dry spells prevailing across most tea areas of Assam and WestBengal. Assam and West Bengal are the major tea-producing states, accounting for 80% of India's total output. Assam which accounts for 50% of country’s total production, has been passing through a period of scanty rainfall and higher temperatures this year. The unusual weather pattern in the region resulted in wilting of tea leaves followed by unprecedented pest attack mainly looper, helopeltis and green fly. This adverse weather had its effect on production. The overall production for the April-August period of FY-16 has decreased to 624.62 million kg as compared to 626.41 million kg in corresponding period last fiscal.
Tea Exports:
Tea exports from India during financial year 2014-15 declined by 26.92 million kg as compared to previous year. This decline has largely been in the wake of increased competition from lower cost tea producers such as East African countries. Further, other major reason for the decline is fall in production of Assam Orthodox tea caused by scanty rains. However export realizations are expected to improve because of global shortfall and expectation of higher prices. India's tea industry now is eyeing Russia with renewed interest after a gap of 10 years as exports to two key markets of Egypt and Pakistan are not picking up. Exports for the April- August 2015-16 period stood at 74.79 million Kg, as compared to 70.44 million kg for the same period in the previous year.
Average Auction prices:
In India more than 50% sales of tea is routed through auction at various auction centres located in North &South India. Average auction price of tea for April- Sept period of 2015-16 has declined to Rs 127.39/Kg as compared to Rs 135.11/Kg in same period last fiscal. Prices are expected to firm up due to robust demand in domestic as well as global markets and due to below average rainfall in growing regions of tea. Further reports of lower production in Kenya on account of dry weather conditions too are expected to support prices.
Coffee:
In India, coffee is traditionally grown in the Western Ghats spread over Karnataka, Kerala and Tamil Nadu. Coffee is predominantly an export oriented commodity and 65% to 70% of coffee produced in the country is exported, while the rest is consumed within the country. The two main varieties of coffee viz., Arabica and Robusta are grown in India. Arabica is mild coffee, but the beans being more aromatic, it has higher market value compared to Robusta beans. On the other hand Robusta has more strength and is, therefore, used in making various blends. Arabica is grown in higher altitudes than Robusta. The harvest of Arabica takes place between November to January, while for Robusta it is December to February.
Coffee Production:
For the year 2014-15, India’s coffee production stood at 327000 MT as compared to 304500 MT produced in corresponding year ago period. The Arabica and Robusta varieties accounted for 30 per cent (98,000 MT) and 70 per cent (229,000 MT) of India’s overall coffee production, respectively, in 2014-15. However production for year 2014-15 showed a marginal decrease of 1.21% or 4000 tonnes over the post monsoon estimate of 331000 MT, the loss were mainly from Karnataka. Coffee areas witnessed a long period of drought after receiving blossom showers followed by an extremely harsh monsoon. There was heavy proliferation of white stem borer in the arabica growing regions because of extended drought and the subsequent heavy monsoon damaged robusta crop. Overall the crop prospects of 2015-16 at post blossom stage are quite encouraging due to the timely and adequate blossom and backing showers in the traditional and non-traditional areas.
Coffee Exports:
India's Robusta coffee variety has a good reputation among international buyers. European countries continue to be the major buyers of Indian coffee. Italy, Germany, and Russia are the top export destinations for Indian coffee, with India exporting an estimated 90 per cent of its production. Coffee exports witnessed a fall of 8.3% for the financial year 2014-15 and stood at 286,545 MT compared to 312,625 exported in year ago period. The drop in volumes of coffee exports is due to sluggish demand from major European buyers. Further, coffee prices in international markets are under pressure due to production surplus in Brazil, the world’s leading producer. Also, Brazil’s currency is ruling weak against the US dollar. Coffee exports are expected to surge on good demand for Robusta variety. However, export realization may remain lower due to fall in global prices reacting to the currency depreciation in Brazil.
Growth Drivers for Tea & Coffee Industry:
Consumer preferences for branded packet tea over open weight have been dominating unbranded products.
Rising consumer awareness about the health hazards of carbonated drinks is leading to the shift towards tea and coffee. There has been rise in health conscious population who prefer antioxidant property of tea or instant energy of coffee.
Traditionally considered as a hot beverage , the penetration of tea in the non-alcoholic cold segment is driving force for tea industry owing to rising affinity towards ice-tea which currently accounts for over 5% of entire non-alcoholic beverage market in India
Rise in discretional income among young population who has a lot of appeal for café culture is another growth driver for the industry.
Initiatives for tea-coffee sector:
At a time when climate-change is impacting tea-cultivation in a major way, efforts are on to make tea estates climate-smart so that the industry develops resilience to uncertain and negative climate change impact. A project has been launched by the Tea Research Association along with Southampton University on climate for investigating the impact of climate change on tea production and livelihoods in North-East India, revolving around climate variability, land-management practices and climate-smart agriculture practices.
The Centre is planning to liberalise the Tea Act, so as to increase tea production and productivity by bringing additional areas under cultivation by waiving the present stipulation of obtaining permits for bringing additional areas under tea cultivation.
To ensure quality and increase exports, C-DAC (Centre for Developing Advanced Computing) is presently working with TRA on a spectrometer which will enable tea growers especially small ones to detect traces of pesticides early.
Tea board of India has come-up with new initiative “Assistance under scheme for promotion of packaged Teas of Indian Origin (Brand support) in overseas market” to help Indian exporters for marketing teas of Indian origin in overseas markets on a sustained basis.
To tackle the declining trend in Arabica production, all producing countries of the variety have joined hands for a coffee research programme. Lower productivity in India has been attributed to non-release of better clones, limited mechanisation, pest infestation and paucity of labour.
This global collaboration would probably give some leads.
The Commerce Ministry has formed a committee that will suggest ways to effectively deal with 'stem borer' pests in coffee plantations and reduce crop losses. The move is aimed at enhancing productivity of coffee in the country and further boosting its exports.
Coffee board of India launched a scheme in association with Canara Bank for granting term loans up to Rs 100 Lakh to Micro & Small Enterprises (MSE) to establish Roasting, Grinding and Packaging industry of Coffee. The objective of the scheme is to enhance quality of coffee product and achieve value addition through introduction of improved technologies in roasting, grinding and packaging which will result in boosting domestic coffee consumption and entrepreneurship in the coffee sector especially in the NonTraditional areas.
Outlook:
The growth in Indian tea-sector during the ongoing financial year is expected to remain stagnant, with tea planters in doldrums due to various factors including adverse climatic conditions. Erratic weather condition too may affect production in the growing southern and northern regions. Domestic consumption of tea has increased as compared to production and this may help in better price realization.
However, the Indian coffee market is expected to remain firm with good demand for robusta variety. Further, the domestic coffee consumption too has been continuously growing largely on account of a thriving independent upscale cafe culture. Meanwhile rapid change in consumer behavior is likely to support Indian tea-coffee sector in near future. Companies in the last decade have positioned tea and coffee as recreational products, which have proved beneficial in attracting younger population. Furthermore, the focus on high-protein, low-sugar diets is stimulating demand for green tea, ground coffee and artificial sweeteners, which have shown strong signs of promise over the past years.
Source:- money.livemint.com
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